Just when you think you've gotten rid of your ex for good, you start getting calls from creditors demanding you pay for debts he or she incurred. While it may be tempting to just ignore the collection agents, the truth is you may still be liable for your ex's debts, which could ruin your credit or subject you to lawsuits if they go unpaid. Here are three reasons this may happen and what you can do about it.
The Debts Were Acquired During the Marriage
One of the most common reasons one ex end up being held responsible for the other's debt is because it was acquired during the marriage. In community property states, any debt obtained by either person after marriage but before divorce becomes the responsibility of both parties, regardless of whose name is actually on the account. In common law states, though, you are only responsible for the debt if it's in your name.
Regardless, while your divorce decree may state your spouse is supposed to pay the bill, creditors can still come after you if they know the debt was jointly owned or accrued during the marriage.
Unfortunately, in this situation, there's not much you can do to stop the collection calls. You can contact your ex and remind him or her about the terms of your divorce. The other option is to pay the debt to keep it from ruining your credit and then suing your ex for reimbursement. Be careful with this last option, though. If your ex declares bankruptcy to escape creditors, you may be stuck with no recourse to get the cash.
Your Name is Still on the Account
Another reason people end up being responsible for their exes' debts is their names are still on credit or loan accounts or they're cosigners on the debt. In this situation, it doesn't matter when the debt was incurred—before, during, or after the marriage—you're still liable for paying what's owed as joint owner or cosigner. So if your ex racks up $10,000 in debt after your divorce, creditors can legally come after you when your ex stops paying.
This is why it's important to remove your name from joint accounts as soon as possible after the marriage ends, particularly if your ex was assigned the debt in the divorce. Be aware, though, creditors are highly resistant to removing joint owners from accounts because it reduces their options for getting paid if the remaining person defaults.
You'll likely have to close the account once it's paid off to end your liability. If your ex can't pay it off quickly, see if he or she will transfer the balance to another individually owned account.
Your Didn't Officially Divorce or Legally Separate
A third reason your ex's debts may come back to haunt you is because you didn't actually get divorced. It may seem odd, but many couples separate physically but never quite make it to the courthouse to make their parting official. It doesn't help that in some states, you must live apart for a period of time before you can file for a no-fault divorce. In Maryland, for instance, you must live apart for a minimum of 12 months before you can file for an absolute divorce.
People get caught up in living their lives and don't think about it until something comes up. As mentioned previously, though, any debts incurred during the marriage may be considered the responsibility of both parties. If you don't make your divorce official, you could still be required to pay your ex's bills, even though you didn't live together when he or she got them.
The best solution here is to get divorced, or at least legally separated. Sometimes you can argue the debt qualifies as separate property and, thus, is your ex's full responsibility. However, this generally only works if your name is not on the account.
For more information about this issue or help with your divorce case, contact an attorney, like one from Bineham & Gillen, PLLC.