How to handle joint debt in a divorce

by | Dec 1, 2017 | Divorce |

One issue that California residents could face after a divorce involves building or rebuilding credit histories. To do this, an individual should make sure that debts held with a former spouse are paid on time. In some cases, this may require an individual to pay them in full even if their spouse was technically responsible for the debt. This is because creditors are not held by any agreement made between a divorcing couple.

Therefore, if the former spouse fails to make payments, it could hurt an individual’s credit score. An effective way to limit the financial fallout from a divorce may be to close joint accounts as quickly as possible. This could remove any financial connection that a person may have with a former partner. It is also a good idea to remove a former spouse as an authorized user of a credit card.

Freezing an account might be an effective way to ensure that new debt cannot be accrued before, during or after a divorce. Furthermore, individuals should not agree to pay more than their fair share even if they are liable for payment in the event the other spouse fails to do so. Setting up affordable payment plans can be a good habit that can help build credit after the divorce is finalized.

Issues such as property division may be hotly contested during a divorce. However, an attorney could help a client learn more about how to handle such issues. The lawyer might explain how state law says property should be divided as well as the factors a judge may use to create an order. If a prenuptial agreement exists, it could spell out what an individual is entitled to.