How do Family Courts Separate Debt upon Divorce?
Today we see that many American couples owe astounding amount of money. It's a common scenario in this era of stern economic crises and credit crunch. This is because of luxurious and emergency purchases that today many Americans have mortgages on their homes, car loans and huge credit card debt. The debt may seem insignificant when you're in a relationship and which is maturing towards marriage. This is a time when everything seems perfect. At this time you absolutely don't bother your rising credit card bills. But, if your marriage ends up in divorce, who will be responsible for the overwhelming debts?
Family Court and the Bills
When a couple file for divorce, primarily they think about their assets. However, debts are also as important as assets, as they play a major role to determine the couple's total worth. You must have access to every bill and financial statement that reaches your house to get a precise picture of your financial condition. In fact, you and your spouse both must have equal knowledge of your family' economic condition and should be involved in significant monetary resolutions.
In a divorce judgement, the court equally distributes the couple' assets and debts. The court further indicates which party is responsible for paying which debts. Usually, the court tries to divide debts and assets equally. For instance, if a spouse receives more property, he/ she might also be responsible for paying more debt.
These rules may vary from state to state. Some states consider the debts and the assets each party brought to the marriage. However, one should keep in mind that a prenuptial agreement could affect any kind of settlement.
When Your Former Spouse Doesn't Pay
Many a times, people cannot or don't pay the debts they were assigned in a divorce. In such an occasion, the creditors might chase the spouse responsible for the debt. Though it seems unfair, it is actually done to protect the rights of the creditors. So, if your ex-spouse isn't paying and if the credit card company comes after you, you may then certainly make a petition to the court to enforce the divorce agreement. The court then might ask your spouse to appear before them and explain why the order was not followed. For this, the spouse can be fined with penalty or can be imprisoned.
Till Bankruptcy Do Part Us?
Many a times before splitting, bankruptcy occurs as the last resort. Again, after divorce settlements, many spouses don't able to pay their assigned debts and seek bankruptcy. The significant thing is, though filing bankruptcy will keep other creditors away, it doesn't stop payments for child or spousal support.
Best Divorce Debt Is No Debt
Debts certainly make a divorce complicated and further keep ex-spouses attached even long after separation. So, the best thing is to clear your debts before or during divorce and start living a new debt free life with your new spouse.
Author Bio:
Pablo Gibson is an Associate Editor with Oak View Law Group. He has been writing on financial topics over the years with special focus on European economy. Pablo also takes interest in debt related issues and contributes articles on debt relief to personal finance blogs.