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Debt, Divorce and Bankruptcy in Florida

By The Golden Law Group

Divorce and debt can be a double whammy.

It’s not only the fact that the stress of money problems is a frequent cause of divorce. That is indeed a major problem. But the issue goes beyond the cause of the divorce to the way that debts get divided up when divorce does occur – and how credit card companies and mortgage lenders respond to that division.

This article examines some of the debt relief issues involved when couples divorce.

Dividing Up Debt

A divorce decree often specifies which party is responsible for paying which debts. For example, one party may get the house and the mortgage debt while the other party gets the credit card debt and other assets.

That may look fine on paper. It is important to remember, however, that both parties remain jointly liable for marital debt, even if the final marriage dissolution order assigns it to one party or the other. In other words, if your spouse doesn’t pay the debt he or she is supposed to pay, you are still on the hook for it.

Credit Cards and Marital Debt

In the case of credit card debt, this can really come back to haunt you. Maybe your spouse charged up a card in the waning days of the marriage. He or she may have enjoyed the shopping thrill, or perhaps was simply being spiteful, hoping to stick you with the bill.

While you were married, carrying heavy credit card debt may have been more manageable. But now, with the added expenses of maintaining two households, the financial problems can multiply, especially if the divorce involves a heated child custody battle with high legal fees. In situations like this, you can end up facing collection efforts by credit card companies, regardless of whether the divorce decree assigned those debts to you.

Mortgages and Marital Debt

Another potential issue concerns mortgage debt. If your spouse got the house in the divorce settlement, you may find it difficult to buy another house of your own anytime soon. This isn’t only because of the financial hit that divorce often involves. It’s because, your credit may not be able to bear another mortgage unless and until your spouse refinances your joint mortgage.

With stricter, post-Recession underwriting standards increasingly in place, that sort of refinancing is not as easy to get as it used to be. G. Donald Golden, a debt-relief attorney in the Tampa area, says that this is a major cause of frustration for many people.

Effect of Bankruptcy

And then there is the effect of bankruptcy on your post-divorce debt issues. There are numerous potential issues here. One involves the impact that a bankruptcy filing by your spouse would have on the joint marital debt you are still liable on. Another issue is whether you, yourself, should file for bankruptcy.

Talk with an experienced bankruptcy lawyer in your area to discuss your specific situation.


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