What happens to debt in a divorce?

What happens to debt in a divorce?

| Jul 3, 2020 | Uncategorized |

It appears that there is an end in sight. The divorce settlement has been negotiated, and the Florida couple is ready to divvy up their assets and move forward with their separate lives. It may seem as if everything has been settled; however, if debt is involved, it is possible that the separate lives may not be completely separated.

If the former couple owns a home, it is likely that the mortgage is in both names. While the property settlement may state that one individual gets the home and will be responsible for paying the mortgage, the mortgage lender will look to both individuals for payment if the responsible party does not follow through with payment. To avoid this possibility, it may be necessary for the individual keeping the home to refinance it to remove the other individual from the mortgage.

Many couples also have joint credit cards. If both individuals are jointly responsible for the card, the lender will look to both individuals for payment regardless of what the divorce decree says. This can be avoided by paying off these joint credit accounts or transferring any balances to individual accounts. Automobile loans may be another problem area. If the automobile loan is in both names, it may be wise to refinance to remove other individual.

Financial concerns can be a concern within many Florida marriages. Once the couple has decided to divorce, it can become even more of a problem. The optimal solution is to pay off any debt prior to the divorce; however, this is not always possible.

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