Once you decide to get a divorce, you start thinking about all the things you need to take care of as you start your new life. Dividing debts and assets is one of the more complicated tasks of the divorce process, and while most couples eventually get through it, but divorcing without any financial ties to your ex will make your life easier. Asset and debt division is not as straightforward as it sounds. Once you and your spouse agree to a settlement agreement and your debts and assets are divided, that is the legal document that will govern the future relationship between you two. It becomes binding once it’s filed with the court. Your debtors have no part of that agreement. So, if your spouse fails to pay debts they agreed to pay in the settlement agreement, those debtors can come after you for the amount owed if it was a joint debt. Additionally, your spouse can have every good intention of paying the debt, but if they lose their job or are otherwise unable to pay the debt, creditors can come after you, and the debt will negatively impact your credit.
Paying Off Other Debts ASAP
If you and your spouse have decided to divorce and it is a mutual parting, eliminating any shared debt before filing can save you a lot of time and stress. If you cannot pay off the debt before you file, paying any shared debt before your divorce is finalized will make for a cleaner separation and dissolution of your marriage. Any shared debt carried from your marriage will keep you connected to your ex until it’s paid in full. It’s advised that you pay off and close any joint accounts. If you have an account where your spouse is an authorized user, you need to also remove their name from those accounts as well. If you plan to sell your marital home, it could be wise to funds from the sale of the home or any savings to eliminate the financial ties to keep you and your spouse connected. Every situation is different, so it’s best to consult with your divorce lawyer before making decisions about your case. If you have a financial advisor, it would also be wise to seek counsel before using your savings to eliminate these shared debts.
4 Tips for Protecting Your Finances During Divorce
If you cannot afford to pay off the debt before divorcing, here are a few tips to safeguard your financial health as you finalize the terms and complete the divorce process.
If you are unable to pay off debts before finalizing your divorce, here are a few tips to protect your financial health during and after your divorce:
- Create a list with every open account. Make a note of those which are shared and those that are individually owned.
- For joint credit card accounts, you can contact the creditors and share your situation. Your creditor can convert the account to an individual account and close it to new charges.
- If you have credit card accounts where your spouse is an authorized user, remove them from the account so they cannot add new charges.
- For debts assumed by either party, use the balance transfer option on an individual account to move the debt to the correct party.
As soon as you’re ready to start the divorce process, you can begin online or by calling our office for help. The terms of your divorce settlement will be as easy if you and your spouse are working together. To speak with a Pennsylvania no-fault divorce lawyer, contact Cairns Law Offices today! Ask us about our $299 no-fault divorce! Our low-cost, amicable divorce could be the right solution for you, so call us today at (888) 863-9115 to get started!