Finances cause many conflicts within a couple. Debt repayment, among other things, is often a source of friction. But what about at the time of a divorce or separation? Who remains responsible for payment? Could you be forced to take on the debts of your ex-spouse?
Divorce or separation: to whom do the debts go?
At the time of your separation, you will have to agree on the division of your property. Your marriage or cohabitation contract probably provides for your financial responsibilities. Your debts are also part of this agreement. But beware! In the event of non-payment, your credit agreement will have the final say!
Indeed, a divorce or separation does not cancel your responsibility towards the debts that you have contracted jointly. Even if you have an agreement that a spouse pays a particular debt, the name on the credit agreement prevails.
Joint credit cards
Are you co-holders of a credit card? Note that all of the transactions listed there belong to both holders. You are jointly responsible for transactions, regardless of who uses the card.
Do you want to free yourself from obligations related to a credit card or variable credit account? You must notify the issuer in writing, stating that:
- You will no longer use the card.
- You no longer wish to be jointly and severally liable for the use made by the other holder.
- You have notified the other holder in writing (by standard mail or email).
It is only from this moment that you will no longer be responsible for transactions made with this card. If in the future you make a payment, it will reimburse the debts contracted before sending the notice.
What if your ex-spouse goes bankrupt?
If your ex-spouse goes bankrupt, you will not be held responsible for debts in his name. However, if you have joint debt, you will be responsible for the full repayment of it.
Have you endorsed your ex-spouse?
In the event of non-payment or delay, you will have to assume only the repayment of a loan that you have endorsed. Indeed, you are 100% responsible for this loan. A judgment cannot release you from your obligation. If the borrower is solvent, try to negotiate with the financial institution to have your name removed from the loan.
What are your remedies?
Your ex-spouse neglects to pay a debt that a judgment assigns to him? The creditor can come back against you. You will have to pay and then claim the amount from him.
Here are some precautions to take to avoid this situation:
- Do not incur any joint debts (including a credit card) if your couple down the wing.
- Do not endorse your spouse at the time of separation. Many do it for different reasons. Unfortunately, this is a gesture that often turns against them.
- Negotiate with creditors to remove your name from any joint contract.
Finally, never take it for granted that everything will be fine. Trouble can arise at any time, without unwillingness on the part of either. Or, one of the spouses may want revenge or be influenced by the arrival of a new lover. So be careful!