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Dividing up the debts after a divorce

On Behalf of | Nov 18, 2019 | Firm News |

When getting a divorce in Mississippi, many couples become so focused on who gets what asset that they forget about the debts. If the house is not paid off, for instance, whoever gets the house may need to keep up with the mortgage on their own. Is the car paid off? What about credit card debts on shared accounts? Does one or both partners have student loans or business debt? These are just some of the questions couples need to sort through when they go their separate ways. 

Experian reminds divorcees-to-be that when they have joint credit card accounts, it might not matter who ran up the bill. In the eyes of the lender, one party is just as responsible as the other. However, the details of how to handle the overall debt allocation at divorce may come down to the state the couple resides in. In a community property state, that responsibility may be an equal split even if the accounts are not jointly owned. Mississippi is not a community property state, so the judge may instead consider who used the cards to pay for what. 

When it comes to the house, NerdWallet points out that one partner can buy out the other. If neither party can afford this, then they can sell the house and split the profits between them. If there is no profit on the house because they owed more than they were able to sell it for, they may need to come to some agreement on who pays how much of the remaining dollar amount. Another option is to maintain shared ownership. Some couples may decide to do this if school-age children still live in the home. 

Tackling the finances in a divorce is one of the tasks people look forward to the least. However, with a clear head, a fair mind and good professional advice, people may find mutually beneficial solutions.