Divorcing couples in Ohio often bemoan the process of splitting up their assets and certainly, this is understandable. Nobody likes the thought of giving up something they treasure or have worked hard to earn or obtain. However, the property division portion of a divorce settlement is not just about assets. Debts must also be dealt with and split in an appropriate manner. For many couples, a mortgage and credit card debts are common forms of debt that they must make decisions about when ending their marriages.
When it comes to a mortgage, Bankrate stresses the importance that a joint mortgage really should not be kept active once a divorce has been completed. The reason for this is because a lender is not bound by the terms of a divorce decree, essentially. If one spouse stays in the family home and is supposed to make the mortgage payments but then fails to do so, the bank could seek payment from the other spouse. Late and missed payments could appear on the credit reports of both spouses.
For a spouse to keep a home, they should be required to get a new home loan in their name only. That is the only way to ensure the other person will not be liable for the debt down the road.
The same concept applies when it comes to credit card debt. Money Management International recommends spouses find a way to pay off as much debt as they can before they get divorced. Any remaining debt should be transferred to new accounts in the appropriate spouses’ names only to avoid issues.