Am I Responsible For My Former Spouse’s Debt After Divorce in Tennessee?

In Tennessee, a divorcing couple will be required to divide their marital assets as part of the process. While asset division is well known and very standard, division of debt is also required and is similar in its scope.

Tennessee is an equitable distribution state which means that any property or debt acquired during the marriage must be equitably divided by both spouses. Consequently, just as there is marital property and separate property in Tennessee, there is also marital debt and separate debt.

Marital Debts

Typically, any debts incurred by a couple during their marriage are considered marital debts and must be shared by both spouses.

During a divorce, a couple will need to decide who will be responsible for which marital debts. If the couple can’t come to their own agreement and the court intervenes, it will make equitable division decisions based on who incurred the debt, what the purpose of it was, who benefited from it, and who best has the financial ability to pay it.

Based on this information, the court will determine who will be responsible for which debts going forward and this information will be set out in the settlement agreement or decree.

Separate Debts

Debts incurred before your marriage or after your divorce or separation, are considered separate debts. The court may even allow debt that only benefited one spouse incurred during the marriage to be considered as separate debt in a divorce proceeding. Separate debts are the responsibility of each individual spouse and the other spouse will have no responsibility for them.

How Does Debt Division Work With Marital Debts?

The settlement agreement or decree specifies who is responsible for the payment of which debts after the divorce, but it is not always that easy. When a former spouse doesn’t pay the debts that were ordered as their responsibility under the settlement agreement or decree, the other spouse may still be responsible for those debts.

While the divorce settlement or decree determines who will be responsible for payment of the debt, it doesn’t change a creditor’s rights under the law to collect on it from either party. When one spouse has agreed or been ordered to pay a debt by the court and they fail to do so, if the other spouse’s name is still on the debt, the creditor has the legal right to go to them for payment.

Protecting Yourself From Debts That Aren’t Yours After Divorce

Both parties can still be legally responsible for joint debt after a divorce. Even when an ex-spouse has been ordered by the court to pay, the creditor may still try to collect from you if your name is still on the account. If these debts are left unpaid, it may seriously affect your personal credit. Your recourse in this case, would be to pursue a claim against your former spouse in court. Consequently, it is important to protect yourself as much as possible.

If possible, revolving credit cards, consumer loans, or bank accounts should be paid off and the joint accounts closed. If this is not possible or not financially feasible, spouses should remove each other’s names on the accounts so they are only in the responsible person’s name after the divorce. If you are being harassed for payment for a separate debt incurred by a former spouse,  you may be able to file a claim under the Fair Debt Collection Practices Act.

When Debt Division Becomes More Complicated in Tennessee

In the case of a mortgage, when one spouse has been ordered to pay monthly payments and fails to do so, the lender can still come to the other spouse for payment. It is impossible to remove one spouse’s name from an existing mortgage. To do so, the property securing the mortgage will have to be refinanced in the responsible party’s name only or the property sold. Consequently, there are times when debt division and financial responsibility can become complicated.

When navigating a divorce, financial matters are one of the largest hurdles a couple will face. Getting financial advice and guidance from an experienced Murfreesboro divorce attorney can help ensure that all financial matters are addressed and resolved so you can step into your new life with confidence.

At The Law Office of David L. Scott, we can help ensure that all property and debt division is fair and you are as protected as possible. Call us at (615) 896-7656 or contact us through our online contact form to schedule a consultation.