If you are one of the many residents in New Jersey who is getting divorced, you know that this process can be complicated and emotionally challenging. As you work through how to disentangle yourself from your former partner, you will also want to pay attention about how you may be able to protect yourself and your financial future.
While you are negotiating the terms of your divorce, it is likely that you and your spouse will have to decide not only how to divide up any shared assets you have, but also how to divide up any shared debt you have. As explained by SoFi, the date that is decided as your date of separation will be important in this exercise because it is the date on which any joint debt accrual may end. Many factors may go into determining this date and you should know that debt incurred prior to this date may well be deemed joint.
Money Management International recommends that divorcing couples make it a priority to eliminate their joint debt before their divorce is finalized. This is because holding onto any joint debt accounts has the potential to cause serious problems down the road regardless of what is stipulated in your divorce settlement.
If your spouse is supposed to pay off a credit card account that was issued in both of your names, but is late on any payments or misses payments, your credit may take the hit as well as theirs. If they eventually file bankruptcy, the creditor may pursue you for repayment. You may have recourse in court to get out of this but there may be a significant hassle, time and cost involved in doing so.