Divorce splits a household in two. The assets get divided. The income gets divided. The space gets divided. But debt, more often than people expect, stays complicated long after the papers are signed.
A divorce decree may assign specific debts to each spouse. But creditors are not bound by your divorce agreement. If a joint account goes unpaid, both parties can still be held responsible by the lender, regardless of what the court ordered. Understanding this, and planning around it, is one of the most important things you can do for your financial future after divorce.
Get a Full Picture of What You Owe
Before you can address marital debt, you need to know all of it. Pull credit reports for both parties. List every joint account, every card, every line of credit that carries both names. You may be surprised what you find, particularly if one spouse managed the household finances primarily.
Separate Joint Accounts as Soon as Possible
Every joint credit account that remains open after your divorce is a shared liability. Your ex can run up the balance. Your ex can miss payments. Either way, your credit score takes the hit. Work with your attorney to address joint accounts as part of the settlement. The options are typically: pay them off and close them, refinance them into individual accounts, or allocate them with legal protections that give you recourse if the other party defaults.
Get Debt Allocation in Writing
Whatever debt division you agree to, it needs to be part of your formal divorce agreement, not a verbal understanding. And ideally, it is backed by an indemnification clause: a legal provision stating that if your ex fails to pay a debt assigned to them and you suffer a credit or financial consequence as a result, they are legally obligated to make you whole.
Refinance Where You Can
For larger debts like a mortgage or a car loan, the cleanest outcome is to refinance in one person’s name alone. Yes, this requires qualifying independently for the loan. That is not always possible, especially in the immediate aftermath of a divorce. But it should be the goal. Joint debt that cannot be refinanced should be closed or paid off, or at minimum tracked closely until it is.
Avoid New Joint Financial Obligations During the Process
From the moment you decide to divorce until the ink is dry, avoid taking on any new joint financial obligations. No joint accounts. No co-signed loans. Nothing that ties your financial future to your ex in a new way. This protects both of you.
Rebuild Your Credit Independently
If most of your credit history was tied to joint accounts, you may find yourself starting relatively fresh as an individual. Open a card in your name alone, use it for small purchases, and pay it off in full each month. Over time, your independent credit history builds. This matters more than most people realize when it comes to renting an apartment, buying a car, or eventually buying a home on your own.
Questions about how debt is handled in a Massachusetts divorce? Contact Fitzgerald Family Law for a consultation. We can help you understand your rights and options before you agree to anything.