Dividing assets in a divorce is something you probably have a plan for, but did you know that part of the process is also dividing your debts? Assets and liabilities both fall under the property division portion of a divorce in Indiana, so you need to prepare for this. While you may want the assets from your marriage, you likely do not feel the same about the debts.
However, the division of debt may not be as equal as the division of assets. According to Forbes, secured debts typically remain with the asset. For example, if you get a car in the divorce agreement and it has a loan, you are likely to also get the loan. This may not always be the case, though.
When it comes to debt, there are some special considerations. For example, if you bought a house during your marriage and your spouse gets the house in the divorce, he or she may have a court order to make the mortgage payments, but that does not mean you have no liability. Your creditor can still hold you both responsible for any joint debt. You will have to remove yourself by contacting the creditor. In the case of a mortgage, this requires refinancing.
Dealing with creditors
Keep in mind that your creditors do not care if you divorce. They only look at the personal liability of each person who agreed to be responsible for a debt. Even if there is a court order in your divorce, the creditor does not have to abide by that. If your ex-spouse does not pay a joint debt, the creditor can still come after you to collect it even if the divorce agreement says it is your ex’s responsibility.
Debts are tricky to divide in a divorce. Make sure that you understand how liability will work for your debts, especially the ones the court ordered your ex-spouse to pay.