Family Law

Dividing debts in a Mississippi divorce--who is liable?

By Robert M. Kisselburgh, Esq.

Liability for marital debts when you divorce in Mississippi

In a recent Los Angeles Times article, the author gave some good tips to couples dividing debts during a divorce. The overriding concern and point that should be reiterated is that just because you and your spouse agree that one of you will be responsible for a debt, it does not change the relationship with your creditor. Here is an example.

A Madison County, Mississippi couple are divorcing and have joint credit cards with American Express and Visa. The husband agrees to take on the American Express payments while the wife agrees to pay the Visa bill. After the divorce, things don't go well for the husband and he defaults on his payments to American Express. American Express goes after the wife for payment. She says how can that be? Well, if she was a joint account holder on the card at the time the debt was accumulated, then she is jointly liable for those debts. She probably has an agreement from her husband to indemnify her (standard in a divorce), but that indemnification agreement means nothing to the creditor. American Express must be paid and the wife will be jointly responsible. While she can then go after the husband for the money, if he does not have it, the indemnification agreement does not do her much good.

Lessons learned?

1. When divorcing, you need to ensure that you are aware of all debt accumulated during your marriage.

2. If you have joint credit cards, cancel the joint cards.

3. If there are balances on those cards, make sure one spouse opens up an account to transfer the balance to so it is no longer a joint debt or pays off the debt.

4. As for other jointly-held debt, such as mortgages and automobiles, you need to refinance the debt if possible. Those lenders will enforce their original agreement where both of you agreed to pay the debt even if your divorce decree says one spouse is responsible for payment.

I spoke about this issue before in a previous post. If you find yourself contemplating a divorce, call the Kisselburgh Law Firm at 601-936-4040 or contact us online to set up a consultation to discuss your rights.

Full post as published by Mississippi Family Law Blog on April 19, 2009 (boomark / email).