As you face the realities of divorce in Maryland, you might find yourself losing sleep over questions about finances. Who will be responsible for paying off those credit cards, loans and mortgages? It is a question that can cause stress and anxiety, especially when you are trying to envision a stable future for you and your children.
Generally, you are not responsible for your spouse’s debts after divorce. This means that if your partner took out a personal loan or credit card in their name alone, you typically would not be liable for that debt post-divorce. However, there are some important exceptions to this rule that you should be aware of.
Debts during separation
In Maryland, the debt of separation is significant when determining responsibility for debts. If you have separated and your spouse uses a joint credit card for personal expenses, you might still be responsible for that debt. This is because, until your divorce is final, you and your spouse are still legally married.
Marital property debts
If you and your spouse own marital property, such as a house or a business, you may both be responsible for the debts related to that property, even after the divorce. The law considers the property a joint asset; therefore, the debts associated are also joint.
Co-signed loans
Co-signing on a loan with your spouse creates a lasting financial connection, even after divorce. This situation commonly arises with mortgages, car loans or joint credit cards. Even if your divorce decree states that your ex-spouse must pay a particular debt, creditors can still pursue you for payment if your name remains on the loan. To protect yourself in this situation, consider refinancing joint loans to remove one spouse’s name or selling the asset to pay off the debt.
Divorce with a plan
As you move forward in your divorce, it is crucial to approach debt division with a clear strategy. Understanding your obligations can help you negotiate more effectively and make informed decisions about your financial future.
