Read this: Divorce Don'ts

March 7, 2010 by thinkhappy

DIVORCE DON'TS

When you are constructing your divorce settlement agreement pay particular attention to the debt and how it will be transferred. If you and your husband have joint responsibility for a mortgage, car loan, home equity loan, credit cards, etc., don’t expect to eliminate your obligation to pay just by stating the ownership change in the settlement agreement. The only way to make sure that you are not responsible for a debt is to either have your name removed from the original loan agreement (pretty impossible), or have the joint loan closed out and a new loan opened under the individual’s name. For example, your divorce agreement states that your ex-husband will get the house and he will pay the monthly mortgage which is currently under both of your names. Just because the judge approves the divorce agreement that calls for this mortgage ownership change, doesn’t mean the lender will automatically take you off of the mortgage documentation. Lenders, and particularly secured lenders, (e.g., mortgage, car loan companies) would rather have two people on the hook for paying back the loan. So, to be sure that a creditor won’t come after you if your husband doesn’t pay as agreed, have any joint accounts closed as part of the finalization process, (this includes joint credit card accounts, too), and new ones opened in the name of the individual who is taking the responsibility for paying back the debt.

Written by Hollis Colquhoun

Learn more about Hollis Colquhoun

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