It’s common for people who are considering or preparing for divorce to start thinking seriously about how they would like to divide assets accumulated during the marriage with their spouse. It’s critical, however, to focus just as much on how debt should be divided.
Like assets, debts accumulated during the marriage are typically considered marital or joint debt. This usually includes any mortgages and balances on joint credit cards, car loans and home equity loans. A couple who have been married for a number of years can easily have tens (if not hundreds) of thousands of dollars in joint debt.
How is debt divided in North Dakota divorces?
North Dakota is an “equitable distribution” state. That means the law instructs that assets and debts are to be divided equitably in divorce, which doesn’t necessarily mean equally.
It’s best when divorcing couples can work with their individual legal representatives to work out a debt division agreement that’s fair to both of them. If they can’t, a judge will have to determine how it’s divided. If so, it’s crucial to make sure that they know who accumulated the bulk of the debt on specific credit cards or loans.
Making sure you aren’t saddled with your spouse’s debt
It’s one thing to have a judge assign a specific amount of debt to you and your soon-to-be ex. It’s another to make sure they pay it.
If your name remains on a joint credit card or loan that they’re responsible for paying off and they fail to do so, you’re responsible for the debt as far as the creditor is concerned. They don’t recognize divorce agreements – only whose name is on the credit card or loan agreement. While you can take your spouse to court to get them to pay, it’s usually best to take your name off any debt products your spouse is responsible for paying.
This is just a brief overview of debt considerations as you divorce. Everyone’s situation is unique. For example, you or your spouse may have individual debts that became commingled during the marriage. With experienced legal guidance, you can better work to protect your credit rating and your financial future as you sort out your debts.