Married individuals usually accumulate assets, but those sometimes come with debts. If the couple opts to divorce, they will have to determine what to do with their debts. This is sometimes just as challenging as dividing the assets.
One thing that people should remember is that debts don’t go away when they divorce. Instead, these debts must be paid off, regardless of what the property division settlement says.
Creditors aren’t part of the divorce
A divorce is a legal matter between the two people who are legally ending their marriage. The creditors aren’t part of this process, so they don’t have to abide by the order that states which person has to cover which debts. Instead, they can still hold both parties responsible for jointly held debts. This means that if the person ordered to pay the debt doesn’t pay it, the creditor can report the non-payment on the credit report of each individual and pursue legal action against both parties.
Options for handling debts
Because of the concerns about non-payment and the impact on the credit reports, some people want to know if there’s another option. Fortunately, some people going through a divorce can liquidate assets to cover the debts. If the liquidated assets pay off all the debts, both parties will have a fresh financial start after the divorce.
Working with someone who can assist with the entire property division process is beneficial for individuals going through this type of situation. It’s critical that both parties ensure they take the necessary steps to protect their own interests.
