Depending on the kind of debt you incur during a marriage, you could be liable for your ex-spouses' debt even after a finalized divorce. Creditors are not parties to your divorce, therefore, whether or not you are divorced is irrelevant to them. The real question is what kind of debt you incurred because that will determine how a creditor may go after you. There are two kinds of credit accounts: individual and joint. This article will explore the differences between the two and how they are affected by divorce.
An individual account looks at just your financial history and potential earnings in order to determine if you are eligible to receive or extend a line of credit. An individual debt is your sole responsibility and the responsibility of any authorized user. Conversely, a joint account considers both you and your spouse's financial standing. This also means that you are both responsible for paying back the debt. A joint account allows you to combine assets, which increases your chance of getting more favorable loan terms. However, it also means that the creditor can pursue you and your ex-spouse to satisfy the debt, even after a divorce.
If you are going through or considering divorce, then it may be helpful to comb through your credit accounts to determine where you may be vulnerable. Regardless of how you and your ex-spouse may have assigned the debt, the creditor may pursue anyone whose name appears on the account.
Divorces can be tricky and have hidden pitfalls that you may not consider, so you may want to consult with a family law attorney to consider the legal implications. Often, people are not aware that their divorce decree does not release them from jointly incurred debts. Dividing up property is complicated enough; dividing debt can be even harder.