In a divorce, you and your ex-spouse must determine how you will divide your marital property. This is often one of the most contentious and time-consuming processes in your divorce, as it requires careful calculations and critical negotiations.
However, your property is not the only thing you divide in your divorce. North Carolina law also addresses the division of your debts, or liabilities, you accrued during the marriage. Even if you reach an agreement about how to divide the responsibility for paying debts, what happens next?
Steps to actually divide the debt
Your divorce decree may designate who is responsible for repaying a specific debt or loan. However, it is critical to remember: loan agreements are contracts. The lenders you make that contract with will not necessarily care about your marital status. They care about the names on the agreement and getting their payments on time.
So, even if you divide responsibility, during or after the divorce you must take steps to manage that debt and protect yourself as well. That is why it is critical to take steps such as:
- Staying on top of payments: There are a lot of details to keep track of during a divorce, but make sure you regularly review your finances and make payments – that you are responsible for – on time.
- Considering balance transfer options: This can be a helpful option for significant credit card debt that may take more time to pay off. It is possible to transfer the balance from one account to another. This allows you to move the remaining amount in a joint account to a new, personal account. When considering this, take care to review your options, as it will involve opening up a new credit card. You want to ensure the terms fit your needs.
- Closing joint accounts: Once balances are paid off – or transferred – make sure you properly close joint accounts.
- Refinancing loans: For example, if you are keeping the family home, it will be necessary to refinance the mortgage to revise it and remove your ex-spouse’s name from the agreement.
Handling your finances and liabilities in divorce requires a delicate, strategic approach. It will be helpful to consult an experienced legal guide to effectively address debts, so you can start this new chapter of your life confident in yourself and your finances.