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Divorcing when one spouse has a lot of debt

Money is an issue that many couples in Denver argue about and for some, it may one of the things that causes a marriage to eventually end in divorce. When one person is responsible with money and the other spends often and racks up debt, it can be a recipe for disaster. However, how the spender’s debts will affect his or her spouse will depend on the circumstances.

According to Creditcards.com, if the spender incurred debt using accounts were solely in his or her own name, their spouse will not be held responsible for those balances in the event of a divorce. If both spouses’ names were on the account, however, then a creditor could come after either or both of them.

In addition, student loans are usually taken out in only the name of the person who is using the loan. However, in a divorce proceeding, a judge may rule that the other spouse is liable for that debt if he or she directly benefitted from their mate’s education.

Bankrate recommends that the best way for couples to avoid a divorce showdown over debt is to enter into a prenuptial agreement before they are married. While many people use these agreements as a means of protecting assets or inheritances, they can also be used as a way for couples to keep their debts separate and to set forth who will be responsible for paying what in the event of a split. As soon as the couple separates, each person should open individual bank accounts and credit accounts to ensure that all debts incurred during the separation period will remain independent.

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