How Insolvency and Divorce Operate
The issue is that if both you and your spouse incurred unsecured debts, such as credit card and hospital expenses, you are listed as co-debtors. Even if you had nothing to do with the credit card debt, you and your spouse are still responsible for paying it. Many believe that a divorce eliminates credit card and other unsecured debt. This is because you entered into an agreement with the creditor or other party prior to your divorce; therefore, you are still obligated to pay the debt. There is no simple way out; you and your spouse are jointly responsible for debts. If you are uncertain about your debts or your options, you may wish to contact an experienced bankruptcy attorney.
Guarding Yourself Against Secured Debt
However, you can take measures to improve your circumstances. Even if you choose to file for bankruptcy, you should locate any open joint accounts you have. This affects you if your spouse has a credit card in both of your names, charges thousands of dollars, and does not pay. Obviously, this is not always the case, but it is conceivable.
How do you discover all of these accounts? You must initially examine all of your open accounts. This includes even tiny store credit cards held jointly. You can also save time and effort by obtaining your credit report. Here, you can search for accounts that contain both your names. The credit report may contain information about open and joint accounts.
Accounting Closure
You might be unsure of what to do with these accounts or how to terminate them. If there is an outstanding balance on the joint account, it cannot be closed. Close any joint accounts you have that can be closed. You can then suspend any accounts with a remaining balance; this prevents any additional charges from being incurred. In the event that closed accounts continue to be charged, you must provide unambiguous evidence that they have been closed; the creditor can provide confirmation that the account has been closed.
What if you have outstanding debts?
You may ponder what to do if you still owe money on certain accounts and are potentially still navigating the financial aspects of the divorce. You should ideally pay on these or have your spouse do so; failure to do so can negatively impact your credit score and your ability to obtain new credit cards and loans.
If any of these measures confuse you, you should consult with an experienced attorney at the very least. This is not rocket science, but neither is it simple. If you must file for bankruptcy following a divorce, you should consult with a bankruptcy attorney. It does not always matter who created the debts; if the debt is from a joint account, you both owe money, and bankruptcy can frequently eliminate or reduce the debt.""
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