debt and divorce

The debt should be handled by the divorce decree saying who is responsible for what. Even debt incurred solely by one of you can be held against the other by the decree.

However, that is not as binding as you might think. As long as you're on the debt when it was granted they can and will come after you. Your credit rating will be damaged by your ex's refusal to pay a debt the decree says she must pay. Collectors will call you even if the decree says it's your ex's responsibility.

It's a terrible mess and usually ends up back in court costing more money for the attorneys to get a judgement enforcing the decree. Which the ex still might not pay.

Very often, this ends up in Bankruptcy for one of the spouses or one of the spouses paying everything anyway.

My non-professional opinion is that each party should take out new private loans to pay off the existing joint loans as part of the divorce settlement/decree. This would best protect each party. It will probably be difficult in the case of secured loans such as for cars and houses to get a good loan.

If the divorce will be contested, it's an ugly expensive thing that only rewards the attorneys. In which case you must fight for EVERYTHING or you will get screwed.

If you're getting divorced, it would be educational to sit in on some sessions in divorce court. They are open sessions and it's amazing what silly thing people will fight over in court at the hourly rate of the attorneys. Be prepared for such eventualities.

Change the locks on everything you shared. Cars especially. They have a way of disappearing when the ex's car breaks down and s/he still has a key to yours. Same for the home.

If you've got kids, set up child support payments as a garnishment on your paycheck so you never have to dispute having paid it. Always pay it as courts will treat you badly if you don't.

The above statements are based on my time as a collector and as a student who was required for one of the general ed classes to sit in on divorce sessions.

I've never been divorced.
 
Like phatch I have never been divorced but from what a family member has told me of his experience the last 2+ years, phatch's days in court got it just about right. He gives suggestions that my family member went on to learn the hard way. From what I can tell the best case scenario would be to deal with a reasonable spouse and a fair judge, but I don't know how often that happens.

I seem to remember hearing about establishing a 'financial separation' (in the state of CA) to deliniate old from new debt. My family member is still paying all of her old bills to keep his credit clean and hopes that when the divorce is settled that his payments of her debt after that financial separation date will be credited to him, if not, at least his credit didn't go down the toilet.

I saw this in the Boston Globe: http://www.boston.com/bostonglobe/e...3/the_chilling_effect_of_states_divorce_laws/

concerning the divorce laws in this fair State:thumbdn:. Really an eye-opener to anyone thinking of marrying a divorcee from this state, one who owes alimony that is.

Good luck.
 
Debt can also be used as a bargaining chip, I used it as one when I was divorced. My wife and I have moderate debt but that state I live in does not assign alimony. For her to assume half without a job would be extremely hard and would destroy her good credit (and it was good thanks to me). I made the offer of assuming all debt and zero child support from her in exchange for full custody of our daughter. I got the bills and my child...yep I definitely got the best end of that deal.
 
If it isn't too late, move your money out of a bank you may have shared with a spouse and put it in a bank unknown to them. Immediately cancel any joint credit cards. If you are male and the divorce happens to be particularily bitter, be prepared for restraining order to be placed against you...it is a favorite tactic. I realize none of that answers your question, but it should be considered. Try to eliminate any emotions and treat it like a business deal, or you will get screwed if your soon to be ex is all business and you are all wounded heart.
 
One other thing to note is that while the decree of dissolution (or whatever your state calls it) will allocate debt between the parties, it does not supercede your pre-existing obligation to the creditor to pay the debt.

Example: husband and wife sign a car loan. The decree of dissolution says that the wife must pay the entire car loan. After the divorce, the car company can still come after the husband seeking payment, even though the decree says that the wife must pay it. The decree is binding only on the parties, not the car company. If the car company sues the husband or otherwise makes him pay the car loan, he can seek recovery from the wife in divorce court.

Hope that makes sense. This is why it is a good idea to settle as many debts as possible at the time of divorce, and/or to get your name off of a home or car loans by refinancing.

This is not legal advice. :)
 
Alot of good advice so far. Here some things that I learned as I went through a painfully long divorce. I too was stuck with 100% of the bills. Hire a good attorney, I hired a female one, makes you look "softer" in court. Then listen to her and follow her advise. My ex took everything except my truck and the one c-bag I had with me. I had to start completely over, except this time I was 26k dollars in debt (not counting the vehicles and utilitie bills). Get ready for all the dirty tricks, I was followed by a private investigator, arrested for phone harrasment (it was later dropped). All in all you have to remove yourself from the situation emotionally, if you can't do that then you are not ready to get a divorce. Shut her off completely, bank accounts, credit cards.... everything. Don't even speak to her except through your attorney, she may seem ok and friendly now but its probably early... wait till she gets served, then it will be on. Start a journal write everything down, and start to itemise your life. If you have any precious sentimental items, hide them at a friends or family members house. She will try to use that stuff to drag down the tempo of the divorce and drag it out because depending on how long you were married she won't get anything after the divorce so she will try to hang in limbo for as long as she can. That brings me to another point, a temporary order, this can be invaluable during the separation. It is like a pre-divorce it outlines how much you will pay, child support, visitation, who is going to move out, who gets what vehicle...everything. It can also include mutual restraining orders. This will eliminate all the he said she said. One last thing, if your ex is like mine you will really have to turn up the situational awareness. Look for people following you, note where you park your car, look for scratches, flat tires. People coming up to you in social settings and sart running there mouth, hang up calls ( I changed my number twice). If you think I am joking about this, just wait. My attorney told mine was mild compared to some. Good luck
 
A buddy at work is currently in the same boat. One of the physicians we work with had a nifty idea, he said he'd used about 4 years back during his divorce: Find out who all the really good divorce attorneys are. Find out what they charge for an initial consultation. In our area it was surprising low, and in some cases they didn't charge anything. Sit down and have a consult.

Then when the other party seeks services from the attorney, the attorney can't represent them due to having a conflict of interest.

When I went through my divorce it was surprising painless. We were young and didn't have a lot of assets and almost no debt. The only thing of value I had was my truck. By the time the final hearing took place she'd gotten herself another vehicle but she wouldn't sign off on the title. So I sold the truck to myself and took her off the title.
 
powernoodle said:
One other thing to note is that while the decree of dissolution (or whatever your state calls it) will allocate debt between the parties, it does not supercede your pre-existing obligation to the creditor to pay the debt.

Example: husband and wife sign a car loan. The decree of dissolution says that the wife must pay the entire car loan. After the divorce, the car company can still come after the husband seeking payment, even though the decree says that the wife must pay it. The decree is binding only on the parties, not the car company. If the car company sues the husband or otherwise makes him pay the car loan, he can seek recovery from the wife in divorce court.

Hope that makes sense. This is why it is a good idea to settle as many debts as possible at the time of divorce, and/or to get your name off of a home or car loans by refinancing.

This is not legal advice. :)
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Very good advise, and dead on:thumbup:


Chris D. :D
 
I don't know your situation. I came close to a divorce last year that led to a short separation for two months. I came close to seeking financial isolationism and putting everything to a close. What I did instead was take my wife on a vacation - that was really testy and we actually had to end it earlier than planned. I gave my wife her space for a bit but continued to be supportive and tried to seek solutions in a reasonable way. We are back together and our marriage is very strong and secure again. It was a gamble and I could have lost a lot in the process. However, I think I won the bet in the end.

Good luck with your choice!
 
Skinny Joe,
In my state it is possible to call the bar association and get arrange for one free ($25-35) consult with an attorney specializing in your question. We have used this service and on one occasion got excellent help, including and beyond the first consult, for no charge. The next time the advice was accurate but the guy was a jerk. I'm betting if you have a specific question you will be able to get a specific answer.
 
Your local county courthouse will most likely have free divorce packets available, and even though you will still need legal advice, there is a surprising amount of info in those packets. In theory they are designed to allow people to get divorced without legal representation, etc.

At the very least those packets will tell you some basic info about divorce laws in your state, for no cost.
 
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