When you’re going through a divorce, you may already be focused on the assets you want to obtain. One thing you should not overlook is the amount of debt you could be left with. If you share debts with your spouse, it’s in your best interest to find a way to reduce what you owe, so you can walk away from your divorce without debts to pay.
One thing you need to know is that you can make an agreement during your divorce that isn’t recognized by a loan agent. To make something legal, you’ll need to contact the lender to make sure you file the correct paperwork to have your divorce, and your removal from liability, recognized.
If you are a co-signer or the borrower named on the documents, you are completely responsible for any debt you have. Even if you agree that your ex-spouse will pay for those debts and he or she fails to do so, you will be held liable. When lenders make an agreement, they make an agreement with those who sign the debt; changing your obligation in court through divorce isn’t typically recognized until the correct documents are filed to remove you from the debt or a portion of that debt.
What can you do if you think you’re still listed on a debt you shouldn’t be?
Consider reaching out to the lender with your divorce documents and settlement agreement. Some may be willing to drop you from the debt. If not, talk to your ex about taking out a credit line or loan to pay off that debt and place it entirely into his or her name. If it comes to it, you can go back to court to enforce changes to get your name removed from a debt.
Source: the balance, “Debt and Divorce,” accessed July 05, 2017