One messy part of a divorce involves the division of debts. Once you agree as to how to settle the debt, you may each become responsible for certain debts, even if the debts are in both names. The problem with this is that if your ex does not pay the debts he or she is liable for, the creditors can come after you for it. This can put you in a bad position and can harm your credit, but there are steps you can take that may help prevent this from happening.
Here are three things you can do to protect yourself from this situation during your divorce.
Make sure the divorce decree includes indemnification clauses
Indemnification clauses are commonly used in divorce decrees for issues relating to joint debt that is split in a divorce. These clauses are designed to protect each spouse from debt the other spouse is responsible for. They often state that one spouse is not responsible for a particular debt, and it will list the particular debt the clause relates to. A divorce decree may have one indemnification clause or many, and you should make sure there is one for every single debt you jointly own.
Unfortunately, creditors do not have to abide by your indemnification clauses. Creditors will come after both people if both names are on the debts. If this happens, it can ruin your credit and can put you in a tough financial position.
Include other requirements on your divorce decree
There are two other things you may want to have included on your divorce decree to protect yourself from debt your ex is responsible to pay. The first is adding an agreement to the decree that provides one spouse compensation if the other spouse fails to pay a debt that was in both of their names.
For example, if your ex files for bankruptcy on joint debts, the creditors may come after you for the debts, even if there are indemnification clauses protecting you. This additional statement could read that your ex would have to pay you an amount of money equal to the amount the creditor is coming after you for. This might make your ex think twice about filing for bankruptcy, because he or she would still be responsible to pay the debt.
The second thing to include is a time frame requiring each of you to get the debts in your own name. For example, if you are responsible for a credit card bill in both names, you may have 60 days to get this bill transferred to an account that is in your name only. This might require calling the credit card company to see if they can remove the other name from the account, or you might have to take a personal loan in your name alone to pay off the credit card debt. If only one person's name is on the debt, a creditor cannot come after the other person.
Take your ex to court for restitution
If you can protect yourself in these ways and your ex does not abide by the agreement, you have the right to take him or her to court to seek restitution. The court will stand by the divorce decree and its orders, which makes it easy to win a case if you have proof your ex did not do what he or she was supposed to do.
Divorces can be complicated, especially when it comes to dividing joint debt. If you would like to learn more about how you can protect yourself from your ex-spouse's debts, contact a firm like Harold Jarnicki Attorney At Law.