Many Worcester readers may assume that property division in a divorce can be resolved through a 50/50 split of assets and marital properties. But in Massachusetts, the assets and properties are divided through equitable distribution, wherein the marital property must be identified and valued. However, assets and properties are not the only things subject to division; debts incurred during the marriage are also included.
When it comes to debts, filing a divorce does not separate the obligation of both spouses to pay debts incurred jointly. In the case of joint accounts, creditors don’t care about how the division of assets and properties are settled. Accordingly, any debts in the names of both spouses can still be the financial obligation of both even after divorce. The failure of one former spouse to pay may hurt the credit scores of both parties. Credit scores are important for divorcing spouses in Massachusetts because they can impact each spouse’s post-divorce life.
Credit scores represent an individual’s credibility to pay when it comes to loans and other financial matters. Unfortunately, divorce can severely decrease a spouse’s credit score. Due to this, divorcing couples may need to discuss the issues that concern their credit, debts and divorce.
Divorcing couples may have to close accounts in both parties’ names before the divorce is finalized. If the account still has an outstanding balance, spouses may need to freeze the account to avoid additional charges and inform the creditors about the separation. In instances where both parties promised to pay the debts separately, one spouse may monitor the payments if possible. Doing so may inform the spouse if the other partner is falling behind on the payments. If that’s the case, and if the parties divorce decree provides for compensation, the other spouse may choose to pay the balance entirely just to protect their credit score and then seek reimbursement from the other partner.
Property division is one of the most important issues in ending a marriage because any wrong decision can have a severe impact on both parties financially. With this in mind, taking consideration of the debts obtained during the marriage may safeguard the credit scores and financial stability of the divorcing spouses.
Source: MSN Money, “Don’t let your ex trash your credit,” Liz Weston, March 20, 2013
