Many people are focused on how to divide assets when they’re going through a divorce, but that’s not the only consideration they should think about. Debts that were acquired during the marriage don’t automatically disappear. Instead, they will have to be divided during the divorce.
The division of debts isn’t always easy. This is due, in part, to the risks that come with splitting up the debts.
Assignment of debts
The division of debts goes hand-in-hand with the division of assets. The debts are sometimes used to balance out the assets so that both parties have an equitable property division.
Risks of assignment of debts
One of the biggest risks that comes with the assignment of debts is that your credit history can suffer if your ex doesn’t pay the debts they’re assigned. Creditors aren’t part of the divorce, so they don’t have to abide by the assignment of debts that’s set by the court. This means that if either party fails to pay, the creditor can report on both people’s credit reports.
Another option for debts
There’s another option for debts that’s present in some divorces. If there are marital assets that can be liquidated to pay off the debts, doing so would prevent the risks that come with the assignment of debts.
It’s imperative that you consider the logical side of the property division process. Your goal should be walking away from the divorce in the best financial place possible. Because emotions can rule in these cases, it may be best to work with someone who can assist you in determining what options are in your best interests.