Divorce:

Debt

Less appealing than the division of property, but just as necessary, is the division of debt, which most couples have in some form; in some cases the debts exceed the assets.  Either the court will decide or the couple will agree on a division of the responsibility for debts. 

Debts jointly incurred remain the responsibility of both spouses. In the event that the spouse who was supposed to pay a particular bill does not, the creditor can and will look to the other spouse to collect the amount due.  However, if a court or settlement agreement requires one spouse to pay a particular bill, but he or she does not, and the creditor collects from the other spouse, the spouse who was not responsible for the debt but paid it can sue the other for the loss, or deduct it from future payments owed to the spouse. 

Because of the potential for continued joint debts, even following a divorce, it is prudent to limit one's liability for the other spouse's debts. It is advisable to close joint credit card accounts or other joint accounts as soon as a divorce is pending, that is, unless one has considerable faith in the spouse being divorced.  In the event that the account cannot be closed because there is an outstanding debt that cannot immediately be paid off, a spouse should notify the creditor that he or she will not be responsible for any further debts beyond current outstanding balances.

While one spouse normally would not be responsible for the debts of the other spouse if the debts were incurred only in the name of the spouse who made the purchase, in many states an exception will be made for debts that are considered family expenses. Examples this include groceries for the family, the children's necessary medical expenses, and children's clothes. If a debt is considered a family expense, both spouses are likely liable for it, even if only one of them incurred the debt. Community property states also generally declare spouses liable for each other's debts incurred during the marriage.

Educational loans are a common debt, though courts will usually direct each party to repay his or her own loans for educational expenses. If, however, the debts were incurred during the marriage, it is a possibility that the court directs one spouse to repay the other spouse's educational debts.

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