One challenge of divorce cases is figuring out a good way to divide debts. Without the right solution, you may have problems with creditors coming after you for debts that are really not yours. Division of debt is an issue that can be tricky; however, your divorce lawyer may have some good suggestions as to how you can protect yourself when it comes to joint debts. Here are some tips your lawyer may suggest as you try to determine how to handle these things.
Come Up With An Arrangement As Soon As Possible
A typical divorce will take around 11 months to complete; however, you do not need to wait this long to make the decisions required for the divorce. In fact, you should try to make the arrangements relating to assets and debts as quickly as possible after filing for divorce. The faster you can come up with an agreement as to how you and your spouse will split things, the more time you will have to find ways to ensure that you are protected against the debts your spouse will be responsible for.
Get Rid Of Joint Accounts
If you and your spouse have any types of joint accounts, you should try to get rid of them quickly too. This primarily refers to checking accounts and credit card accounts. If you have a joint checking account, close it out and open up a new account in your name alone. This will prevent the possibility of your spouse taking money that he or she is not entitled to at this time.
Joint credit cards can also pose risks after you have filed for divorce. If you are afraid your spouse will begin using the cards, you should cancel them. You can do this by calling the company and closing the account. This will not eliminate the current balance owed, but it will prevent your spouse from charging any debts on the card.
Split Up Joint Debts
If you know how you will split the current joint debts you have, your lawyer may suggest splitting them legally before the divorce is actually final. There are several ways you might be able to do this, including the following methods:
- Call your creditors to ask if one spouse's name could be removed from the loan or account. This option typically does not work well, but it is worth a try.
- Use personal loans to consolidate debts into your own names. If each of you have good credit, it might be possible for each of you to take a personal loan in your own name. By doing this, you can each put your own debts into loans that do not have the other spouse's name on them.
- Refinance your loans – Another option you could use for car or house loans is refinancing. This is sometimes the only way to get one spouse's name off a loan.
Unfortunately, there are times when these methods will not work. One of the main reasons couples experience problems using these methods is due to bad credit. With bad credit, it can be hard to get a new loan.
Use Indemnification Clauses
If you cannot split up certain debts, your lawyer may suggest placing indemnification clauses in your divorce decree. An indemnification clause states that one spouse is responsible for a debt that is jointly owned. While this will not stop the creditor from coming after you, you can use this clause to sue your ex-spouse if he or she fails to pay the debt. If you have multiple joint debts when you divorce, you may need to add multiple indemnification clauses to your decree.
As you prepare for your divorce, it is important to discuss these issues with your lawyer. Your lawyer will offer good advice and suggestions to help you protect yourself against your spouse's debts. To learn more, contact a divorce attorney today or visit a site like http://www.glfamilylaw.com.
