When you’re going through the divorce process, there are a lot of decisions you’ll have to make. Some of these occur during the property division process. While many people think that property division has to do only with the assets that are accumulated during the marriage, that’s not the case.
Dividing debts is a major undertaking that occurs during the property division process. The way these are handled depends on the specifics of your case. Many couples opt to sell off assets if they have some available so they can pay off marital debts. This is beneficial because it takes away the chance of missed payments.
Creditors aren’t bound by the property division terms
Your divorce is a civil matter that only involves you and your ex. The creditors who hold marital debt aren’t part of the process, so they don’t have to abide by the terms of the property division. This means that if your ex is ordered to pay a joint debt but fails to, the creditor can come after you for the money. They can also report the missed payments on your credit report.
Debts may balance out assets
If you have large assets to divide, there’s a chance that they may not be able to be equitably divided. In this case, debts can be used as a way to balance out the assets. This can be risky because of the risk of nonpayment.
It’s a good idea to work with someone who’s familiar with property division matters similar to yours so you can receive assistance with determining your options. Logical decisions during the property division process may help you to have a more stable financial future after the divorce.