If you and your spouse have joint debt – debt that both of you are legally liable for – the two of you should make every effort to pay it off before your divorce is final. One reason is that the outstanding balances on the joint debt will show up on both your credit reports, which may make it more difficult once you are single again to get new credit in your own names, purchase the insurance you need, rent a place to live, or even to get a good job or get a promotion.
Another reason for not carrying joint debt from your marriage into your new life as a single person is that if your spouse takes responsibility for paying off any of those debts after you are divorced as part of your divorce agreement and then fails to pay the debts or pays them late, you may be dogged by any number of financial and legal problems such as:
- Your credit histories and your credit scores, not just your ex-spouse’s, will be damaged.
- The unpaid debt could be turned over to collections, which will further damage your credit.
- The joint creditors your ex has not paid may come after you for their money. They may even sue you.
- The joint creditors may come after you for the unpaid debt if your former spouse files for bankruptcy.