As a Phoenix bankruptcy attorney I often consult with people who are struggling with post-divorce debt who are clueless about the impact of the divorce on marital debt. It seems that many divorce attorneys do not advise their clients that creditors are not bound by the terms of a divorce decree. What does this mean for the newly divorced debtor? Effectively it means that if your name is on a debt you will continue to be held responsible post-divorce for those debts even if your divorce decree says otherwise.
Why are you on the hook regardless of the terms of your divorce decree?
While it seems unfair it is actual quite simple: a creditor can only hold you liable on a contractual basis for a debt. The creditor’s only contract with you is the original one your signed with them. A creditor is not a party to the divorce decree and therefore the divorce decree has no impact on the creditor at all. Therefore, the divorce decree will not release you from your financial obligation.
What if you weren’t aware of the debt?
As a Phoenix bankruptcy attorney, I can tell you that if this situation occurred in a community property state such as Arizona, you may be held responsible for certain types of debt incurred by your spouse even if you were unaware of the debt and did not sign an agreement with a creditor. This means that certain types of debt created by either spouse are considered joint debt and both spouses are on the hook for these debts. If you live in a non-community property state the debt might be treated differently.
To speak with a Phoenix bankruptcy attorney about marital debt whether pre- or post-divorce please call the Phoenix bankruptcy attorneys at Kamper & Simmons, LLP at 602-277-5625.