If you are getting a divorce in Georgia, in addition to dividing property, you may also need to divide debt. The challenge that you may face is that while you can make an agreement about who is supposed to pay off what debt, creditors do not have to honor what is in your divorce decree.
You may have shared debt that your ex-spouse has agreed to pay part of. You could have debt in your name that your ex-spouse is actually responsible for. Unfortunately, your own credit could be damaged if your ex-spouse does not hold up their end of the bargain. While you could take your ex back to family law court to try to enforce the divorce decree, the damage to your credit may already be done. If your ex files for bankruptcy, you may still be liable for the debt.
Mortgages and auto loans
There are a few ways to handle this depending on what the debt is. Paying off the debt before the divorce may be the best approach but this is not feasible for most people. If the debt is a mortgage, you might agree to sell the home. If one person is keeping it, it might need to be refinanced in that person’s name. A car loan in both names may also need to be refinanced.
For other types of debt, you may also want to look at ways to get it into one person’s name. For example, you might be able to roll a joint credit card balance onto a person’s individual credit card. If most of the debt is in one person’s name, one potential solution is for that person to take more assets in order to balance paying off the debts.
If you are considering a divorce, you might want to gather financial documents and talk to an attorney as well as a financial planner to get an idea of what your finances might look like after divorce. This could help you determine what steps you should take to protect yourself from debt and other financial issues after your marriage has been dissolved.