It is an all-too common scenario—one or more joint debts are allocated to one spouse in a divorce, and that spouse, whether out of spite or necessity, does not pay the debt. As a result, both spouses’ credit scores suffer. In some instances, the other spouse goes so far as to file bankruptcy. Whether your spouse simply refuses to pay or he or she files for bankruptcy because of financial troubles, you want to know, are you now responsible for the debt?
How Debts Are Divided in a Florida Divorce
First and foremost, it is important to understand that Florida follows equitable distribution laws, which means that assets and liabilities are not necessarily divided 50/50, but rather, are divided based on each party’s contribution to the marriage and, subsequently, to the debts. Bearing that in mind, know that it is not uncommon for divorcing parties to have one or more debts in both party’s names, nor is it not uncommon for a debt in an individual’s name to be for items or expenses the couple acquired together.
When dividing debts, a Florida family court judge will attempt to assign liabilities to the person’s whose name it is in, but if too many “shared liabilities” are in a single person’s name, the judge will do his or her best to distribute assets and liabilities in such a way that is fair to both parties. This may mean assigning more assets to a person with the most debt in his or her name.
For example, say a couple’s shared liabilities include a $10,000 home improvement bill and a $3,000 couple’s therapy bill, both of which are in the wife’s name. They also have a $6,000 tuition bill for their child, which is in the husband’s name. The judge may assign the home and therapy debts to the wife and the tuition bill to the husband. However, to make matters fair, the judge may grant the wife an additional $7,000 of the couple’s joint savings.
If the parties prefer, the judge can split the debt as evenly as possible, despite whose name it is in. So, playing off the example above, the judge may assign the home improvement debt to the wife and the therapy and tuition debts to the husband. However, this is not recommended, the reasons for which we will explain more in depth below.
As for joint liabilities, the judge will use the same method he or she used to divvy up shared liabilities in one party’s name: attempt to divide those equitably between the two parties and allocate more to the party who assumes more debt. However, even shared obligations can create trouble post-divorce.
Judges Can Divide Debts, But They Cannot Enforce Payment of Them
Once a judge divides shared debt and signs a divorce order, he or she trusts both parties to comply with the order and assume responsibility for what is rightfully theirs. Unfortunately, what the judge expects is not always what happens.
If one party is assigned a debt in the other party’s name, the person deemed “responsible” is under a court-ordered obligation to pay it. However, not everyone follows court orders—either by choice or because they subsequently lose the ability to pay. For the other party, the consequences would be drastic. This is because it is important to keep in mind that your divorce order is only binding between you and your former spouse—not your creditors. Your creditors do not care who is named liable for a debt, only that it gets paid. So, if your ex fails to pay a debt that is solely in your name, or even in both of your names, the creditor can still come after you for repayment. This is true even if your ex files for bankruptcy, as your name is still on the debt. If you continue to not pay the debt, your credit score will take a hit. Depending on how long the debt goes unpaid, the creditor may file a lawsuit against you, garnish your wages, or utilize other means to collect what is owed.
You Do Have Options
If you worked with a seasoned divorce attorney, your judgement should contain language that explicitly sets forth your spouse’s obligation to pay or refinance any debt which has your name on it and, furthermore, to not incur any more debt in your name (debt includes interest). The judgement should also state that you are “held harmless” from any of these debts, and that if you are forced to repay any of these debts because of your ex’s failure to make good on them, you have the right to seek reimbursement via divorce court. There are also options to be explored in your case to provide security to ensure the payment of a debt. Allow an experienced Boca Raton divorce lawyer to help you peruse your divorce order for protective language.
Work With an Experienced Boca Raton Divorce Lawyer
If you are reading this prior to the finalization of your divorce, you can save yourself considerable headache by working with a seasoned attorney who understands the import of protective language and how and where to include it in the divorce order. If you are reading this long after your divorce has been finalized and because your ex has fallen behind on payments, a lawyer can help you review your divorce judgement and your options. Call the Law Offices of David L. Hirschberg, P.A., in Boca Raton at (561) 763-7622 today.