Florida couples share everything from big-ticket homes and cars to practical every-day items like towels and toothpaste. When things are going well, they may not mind making purchasing choices together and feeling equally responsible for any debt they incur.
When they choose to end their relationship, however, they may not be all that excited to learn that opting to split their possessions also means dividing their debt.
How divorcing couples settle debt
The only question is who will pay what, and Money Management International says couples may make those choices in the initial negotiation process when they are separating all their assets. If they have trouble settling the matter on their own, however, it may go to trial where a judge will resolve it for them.
Money Management International adds some advice for those who want to avoid court proceedings. MMI suggests, if possible, to “pay off or transfer debts ahead of the divorce….”
How transferring debt early offers protection
If paying them off is not an option, transferring them could help. In a transfer, both spouses set up a new account with payment plans in their own names. They move only the debt they are responsible for to their personal accounts. Transferring protects both spouses in the event one or the other is unable to repay what they owe.
In addition to the above, Fox Business suggests putting a hold on any jointly held credit cards. That way, no one can charge anything else on those accounts. Also, Fox Business says including a provision for debt in the divorce settlement can help protect both spouses.