Debt Collectors and Divorce

How Is Debt Divided in Divorce?

In short, debt is generally divided either 50/50 or in a manner that is considered to be “equitable.” When it comes to unsecured debt, such as credit card debt, you can expect to be responsible for around half of the debt accumulated in a marriage regardless of whose name is on the credit card, whether or not you knew about the credit card, or what was purchased with the credit card (generally speaking; however there are some exceptions to this). When it comes to secured debt, the person who gets the assets usually gets the payments—unless you knowingly and willingly agreed to terms that most people would consider to be very unfair, it is highly unlikely that you will be ordered to continue making payments a car that was awarded to your ex.

Secured Debts and Refinancing

For some secured debts, the person who takes the asset and debt is also responsible for removing the other party from the loan—which can mean that the asset needs to be refinanced. Problems can occur when the party who was awarded the asset is financially unable to refinance the asset without the other party’s name on the loan. This is most commonly seen with real estate, however other assets with a significant value may need to be refinanced in order to be placed in one party’s name alone. Issues with debt-to-income ratio can complicate this. Another problem people face is the payments after the debt is refinanced; sometimes the new payments are much higher, especially if there’s a higher interest rate and a higher loan balance.

Can Debt Collectors Come after Me for My Ex’s Debt?

Yes, debt collectors can come after you for debt that is technically your ex’s debt, especially if your name is still on the debt. Although your ex may have been ordered to remove your name from the debt, your ex may not have done so, giving debt collectors the ability to contact you in an attempt to collect. There may be situations where your name cannot be removed from debt, but your ex has been ordered to pay the debt. In those cases, the debt collectors may attempt to collect from you even though your ex was ordered to pay for the debt. In some cases, it may be in your best interest to pay the debt and then pursue compensation from your ex at a later date—however you should discuss your options with an attorney or someone who can give you legal advice that’s tailored to your specific situation.

Can My Ex Destroy My Credit Post-Divorce?

Yes, your ex can destroy your credit post-divorce under certain circumstances. For example, if you and your ex financed some furniture while you were married, and your ex took the furniture (and payments) but didn’t remove your name from the debt, your credit could take a hit if your ex defaulted on the loan or was late to make a payment. This has led some people to begin paying on debt that isn’t theirs in order to protect themselves and their credit score. If this is something you’re going through, it may be a good idea to consult an attorney about additional measures you can take to avoid having to take responsibility for payments that aren’t rightfully yours.

Protecting Yourself Post Divorce

If you’re getting calls from debt collectors about debt that you believe your spouse should be paying, you may need to review your divorce decree for clarification. If you still are uncertain about who should pay which debts, you may need to reach out to your attorney. If you are receiving past-due notices, calls from debt collectors, or seeing a decrease in your credit score due to non-payment, and you do not believe that you are responsible for these debts, you may need to consult an attorney on what your best options are moving forward. While you may be able to just pay the debt in order to protect yourself from late fees, lowered credit score, etc, there will be no way to guarantee that the money is coming back.