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How will debts be handled as a part of the divorce?

On Behalf of | Jun 9, 2020 | Divorce |

Finances are almost always a concern in setting up a new household. When the new household is the result of a Missouri divorce, finances can be an important consideration in structuring the property division settlement. Often, assets and debts are jointly held. This can cause the individual to still be dependent upon the actions of the soon-to-be former spouse. While the individual may be interested in keeping certain assets, the debt associated with a particular asset may not be prudent.

Automobiles are often titled in both names. Along with this, auto loans are often obtained in both names. Typically, each individual will retain the automobile that he or she primarily drives. However, if there are still joint loans on these automobiles, this means that one individual can still be financially responsible for the other individual’s automobiles. One way to avoid this situation is for the automobiles to be paid off and titled individually or for each individual to refinance the automobile in order to remove the former spouse from the loan.

Credit cards can also be a concern. If the account is individually held, the individual will want to make sure that the other does not have an authorized user card. This can allow the individual to continue using it with the possibility of not being responsible for the debt. If credit card debt is jointly held, the individuals may want to look at closing these accounts and seeking individual ones.

Debtors do not look to the divorce decree to decide who owes a debt. This is determined by the original loan agreement. While the individuals may have agreed to how debt will be handled as a part of the Missouri divorce settlement, ultimately, if the individual’s name is still on the account, he or she can be held liable. This is just one aspect that the individual will want to discuss with legal counsel in determining how the property division settlement should be structured.

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