We have discussed property division many times over in our Columbus divorce law blog. In many of these posts, the property division discussion has centered on the division of positive assets, but what about those negative liabilities? In the current economy, a lot of couples have debt, whether it is a mortgage, a car, credit card debt, medical debt or any other kind. Dealing with this type of property is just as important.
A woman currently living in Ohio recently wrote in to an advice column, detailing her post-divorce debt story. In this case, her divorce settlement stipulated that the couple would share or split a large portion of their debt, including the mortgage and the pair’s credit card debt.
In this case, the woman wrote that she had continued to pay the debts that she agreed to in the settlement while her ex-spouse didn’t live up to his end of the bargain. When the mortgage fell into default, the lender began the foreclosure process. When the credit card bill went unpaid, the credit union gave her an ultimatum. Then, there was the unpaid alimony and child support that added to the problem.
While we cannot speculate as to the exact particulars about this situation, forgetting the fact that a divorce settlement doesn’t change the terms of other contracts is something that could lead to this result.
One way to avoid debt issues is try to pay them off by selling some assets at the time of the divorce. This may not always be an option for every couple, and so it is important to absolutely consider the consequences and risks involved in splitting debts.
There are also ways around the ownership issue. For instance, refinancing with a mortgage lender to remove one spouse’s name could be a possible solution.
The moral of this story? Raise these issues and concerns with an Ohio divorce attorney who has extensive experience in handling cases involving complex property division.
Source: Fox Business, “After Divorce, Ex Leaves Joint Debts Unpaid,” Sally Herigstad, Feb. 28, 2014