Consider your joint debts as you prepare for divorce

Like other married couples throughout New York, when you got married, you symbolically became one with your spouse. When it came to more real world matters, you probably melded at least a portion of your finances. You may have a joint mortgage loan on your home, joint credit cards and more. 

It makes sense to pool your resources in order to build the life you want together. However, when the marriage ends, it becomes necessary to untangle these connections, including those joint debts. How do you do that?

Doesn't the court just split joint debts?

Since New York is an equitable distribution state, any debts in your name alone will more than likely become your responsibility after the divorce. However, things get a bit trickier when it comes to your joint debts. The courts will assign each of you responsibility for certain joint debts or portions thereof. This may seem like the end of the matter, but it isn't.

Your creditors probably will not just let you off the hook for joint financial obligations. Those lenders are not a party to your divorce settlement or decree, and they have no legal obligation to abide by it. Even if you tell a creditor that your ex-spouse is responsible for a particular debt, it doesn't matter. You entered into an agreement with the lender, such as through a promissory note or credit agreement, and that is what governs your relationship with a particular creditor.

What can you do?

If you want to avoid legal liability for joint debts, it may help to pay off as many joint debts as possible. Additionally, try to get your name off any joint debts the other party will pay. If you have a mortgage loan and your spouse wants to keep the home, you want your name off that loan. The other party will need to refinance the home in his or her name alone, which may be the only way the lender will release you from any responsibility for that debt.

If he or she doesn't qualify, you may need to take another path to resolve the mortgage loan issue, such as selling the home. Otherwise, if your ex fails to make those payments, the lender retains the legal right to come to you for payment. This applies to any joint debt you do not resolve or get your name off before the divorce is finalized. If a creditor does come to you for payment, you may have to return to court to enforce your divorce settlement or decree.

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