Division Of Marital Debt

Denver, Colorado, Debt Division Attorneys

An important component of any divorce is the division of marital assets: property or assets earned during the course of a marriage are subject to division. Equally important, however, is the division of marital debt. Most couples have joint lines of credit for car loans, credit cards, bank accounts, or their mortgage. As result, both parties are financially responsible for any unsecured debt held jointly. Even if you never have used a credit card, a creditor can initiate a collection action against you if your name is on an account. If an account is defaulted on, your credit score will be adversely affected, jeopardizing your ability to qualify for a future mortgage, car loan, or credit card. As a result, it is vital that any divorce settlement includes terms for the assignment of debt. At McGuane & Hogan, our divorce lawyers work closely with clients in order to ensure their interests are protected in any division of marital assets and marital debt.

Even if you have not initiated divorce proceedings, it is important to understand how debt or bankruptcy will impact your divorce and the potential consequences for determining child and spousal support. To schedule an appointment and discuss your case, contact divorce attorneys at McGuane & Hogan today.

What Happens if My Spouse Defaults on Our Credit Cards or Loans?

If your spouse agrees as part of the divorce to pay off credit card debt or loans, a creditor can pursue you if your ex-spouse defaults and your name is on the debt. Even if your divorce settlement states your ex-spouse will pay off the debt in question, your divorce settlement has no legal or binding effect on your contractual obligations with your creditors.

However, if your ex-spouse fails to pay off the debt as required by the terms of your divorce judgment, you can sue him or her in court for contempt. Depending on the circumstances of your case, the court may liquidate some of his or her assets or take other action to enforce the terms of your divorce settlement.

Negotiation – An Opportunity to Divide Debt

If you and your spouse are willing to enter into negotiation in order to settle your divorce, you may be able to reach an agreement regarding the allocation of marital debt that reduces your exposure to creditors. For example, you may agree to pay off an existing credit card or car loan in exchange for your spouse agreeing to relinquish a claim against your stock or retirement funds. Our attorneys can help you determine what to leverage and how to structure your negotiated settlement to reduce your liability to creditors and protect your credit.

For more information regarding the division of marital debt and how we can help you, contact divorce attorneys at the law office of McGuane & Hogan today.