As Ben Franklin once said, “nothing is certain in life but death and taxes.” The founding father was on to something. When most couples marry, they are certain their love will last till death does them part. But with the divorce rate close to 50 percent this is not always the case. In today’s society, many Montgomery residents dealing with divorce will face difficult decisions, especially with property division.
Dividing assets such as a house or retirement funds has caused many couples to battle it out in family court. When most people think of property division they think of dividing assets, but it is important to remember that debt must also be divided in a divorce. Who gets to keep the debt after a divorce? From student loans to mortgage payments, most American families have debt. In fact, the average American household has over $15,000 in credit card debt alone. So after a divorce, who is responsible for paying it off?
The answer can often vary since no two divorces are the same. Tennessee, like many other states, is an equitable distribution state which requires most marital property to be divided equally including debt. For example, if a couple has a joint credit card debt of $50,000 they theoretically are both obligated to pay $25,000 but this again can depend on the situation.
Credit card companies often go after the signer for debt collection. If one spouse’s name is not on a bill such as a student loan, they may not be obligated to pay after divorce. Like most marriages, many couples share joint accounts. The best way to avoid future debt and bad credit problems after a divorce is to dissolve all joint accounts.
This process is often not easy in Tennessee. An attorney may provide more clarity for any individual struggling with property division.
Source: Fox Business, “Will my Husband’s Business Card Debt Hurt my Credit After Divorce?” Elaine Pofeldt, April 25, 2013