Articles Tagged with debt

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When two people get married, it often makes sense to combine finances. Spouses open joint bank accounts and combine their incomes to help each other pay off debts–both pre-existing debts and new ones acquired during the marriage. In many situations, spouses may depend on one another to be able to cover their monthly bills. This can all lead to a messy situation if the spouses decide to get divorced.

During a divorce, Florida law requires the fair and equitable division of all jointly-owned property and this law applies to debts, as well. However, dividing up debts can be complex, especially if some debts are owned individually and others jointly. The name on the debt does not always mean that person will be solely responsible for the payments, however, and it is important to discuss debt division with an experienced divorce attorney who understands the relevant law. The following is some brief information regarding the division of certain debts in divorce:

Student Loans

Student loans are often individual debts unless the spouses cosigned on the loans or the loans were acquired during the marriage. In such cases, the loans would be considered marital debt and you may be held responsible for sharing the payment unless you and your spouse can agree otherwise. However, even if you agree that your spouse will be responsible for the loans, your name will likely remain on the loans and any failure to repay could affect your credit. Continue reading

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Many people believe that when they get married, their credit score will be combined with their spouse’s and that their credit will be intertwined. Therefore, many people may wonder what will happen to their credit if they later decide to get divorced. First, it is important to understand that your marital status does not directly impact your credit–not at the time of marriage nor at the time of divorce–since at no time does your credit fuse with your spouses. However, this does not mean that your credit score will not be affected due to divorce, as there are other factors that may cause some credit issues.

Joint Debts

Though your marriage does not affect your score, the non-payment of joint debts wil. If you have a mortgage, auto loans, or other credit accounts in both your and your spouse’s names, you and your spouse will have to agree how to continue paying these following separation. Your divorce decree should equitably divide your joint debts in accordance with Florida law, however, you may not be able to refinance certain debts to remove your name. This means that, if the court assigns certain joint debts to your ex-spouse and they fail to pay the debts, your score could be affected. While you may be able to dispute late payments by using your divorce decree or may be able to report the non-payment of debts to the court, this can be a complex process and may not necessarily raise your score. Continue reading