Debt collectors will go to long lengths to collect what they are owed. If two individuals are on an account, the debt collector may go after both parties until the balance is paid in full. During a divorce in California, the debts of the two parties can be divided along with other financial matters in the property division process. Unless the proper steps are taken, joint creditors can still go after both names on the account.
Some people believe that the divorce judgment is enough to protect them from being pursued by creditors when the other party is ordered to assume responsibility for a certain debt. Unfortunately, the creditor is usually not bound by the divorce decree and can still seek repayment from both individuals on the account. The typical joint debts that a couple may share include mortgage, car and home equity loans, along with credit card accounts. The property division process will help an individual determine which debts he or she will be responsible for and which debts will be paid by the other party.
A well-drafted divorce agreement can go a long way toward preventing an unpleasant surprise if one party neglects to cover his or her share of the debt. The agreement could possibly lay out a plan for the two parties to transfer any debts into sole accounts and give a timeline to close any joint accounts. Simply stating that so-and-so is responsible to pay the debt is usually not enough, however, if the account remains a shared one.
In California, every marriage and divorce is different, and there are no perfect answers when it comes to property division. Dealing with creditors can be tough, and there is no reason to make it more difficult. To avoid common pitfalls, many choose to seek the assistance of an experienced family law attorney during a divorce.
Source: citizentribune.com, "Dealing with joint creditors after divorce", Eric Harrison, March 14, 2018