Common examples
of joint debt between two people are a home or credit card where both spouses applied for the loan or a tax return that was filed jointly.
If you have
joint debts with your spouse and he or she does not also file, they are 100 per cent liable for those debts and only those debts.
However, if the bankruptcy is
for joint debt, the bankruptcy will be noted on the spouse's credit report as well.
When you stop making payments
on joint debt, the other person's credit will likely suffer too.
We'll talk
about joint debts, when filing a joint bankruptcy or proposal may make sense and how your debts are affected in the event of a separation or divorce.
If there is
joint debt between you and your spouse, and your spouse doesn't file for bankruptcy, your spouse will be responsible for those debts.
Divorce and Debt - Features information regarding paying off individual and
joint debts during a divorce.
Another
common joint debt scenario may be a couple with a loan who have recently separated.
Contrary to this belief, it is possible to file a bankruptcy or consumer proposal together if you are
carrying joint debts.
And even in community property states, debt before the marriage is
not joint debt.
The married couple may benefit from the lower costs and fees of a joint filing and the ability to discharge
joint debts completely.
As if settling your own debts wasn't difficult enough,
adding joint debts usually makes the equation more difficult.
These types of debts are commonly referred to as
joint debts because you both are liable for repaying the entire loan.
This is not uncommon as a method of dealing with
joint debts owed by a couple who can no longer repay these debts due to their divorce and a change in their financial circumstances.
To understand this, we need to look at two issues: whether debts survive death and whether a debt is
considered joint debt.
But if one spouse takes out a new loan and the
old joint debt is paid off, it will release the other spouse and the bond can be broken.
Learn the pitfalls
of joint debts, so you can plan well and hopefully avoid them.
It won't protect your credit reports from damage if your ex doesn't continue to make payments
on joint debts.
We feature information regarding the process for paying off individual and
joint debts during a divorce.
Additionally, if you make a profit on the sale, you may be able to agree with your ex to use those funds to pay off other
joint debts as well, such as credit cards or personal loans.
You can not normally make another intimation within 12 months of the last one, although there are special rules for people
in joint debt payment programmes through DAS.
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A common misconception is that
joint debts need to be handled individually by filing separate insolvencies.
If your state doesn't recognize student loan debt as
joint debt when you become married, then it's an even dumber reason.
But information released to me by the Department of Education appears to contradict this unofficial position about not letting one person consolidate a
previous joint debt.
The above scenario is only the beginning of more bad credit problems as a result of
joint debt While in college, Annette had accumulated tens of thousands of dollars in student loans.
Sometimes
called joint debts, common examples would include joint credit cards, or a loan that you both signed as co-borrowers.
It should come as no surprise that divorce and credit problems tend to go hand in hand, since the task of
separating joint debts and assets can be a very difficult process, even in an amicable separation.
However, the parties» agreement or the court's decree
allocating joint debts is not binding on a creditor, unless the creditor agrees.
If you've settled your case, it's best to include your plans
regarding joint debt in the divorce settlement agreement your attorneys will prepare, which may also be referred to as a «Marital Settlement Agreement,» «Property Settlement Agreement,» or «Separation Agreement.»
The debtor spouse is no longer liable for that
particular joint debt to the creditor, but the non-filing spouse remains liable to the creditor for the full amount of the debt.
Likewise, couples with
significant joint debts or who have had a long marriage may not qualify for simplified divorce, explains Chicago Volunteer Legal Services.
Letting your ex-spouse, who is responsible
for joint debt, drift into insolvency is not in your interest because you are still liable for that debt regardless of any separation agreement.
For example, if your ex files for bankruptcy after your divorce, creditors
on joint debts can come after you instead.
I'm out of
joint debt with my ex-wife and my credit rating has gone up, [in which](x - AND) I would attribute that a bit to Cambridge.
If your ex-spouse files bankruptcy rather than paying the debts assigned to him in the divorce, you may have to deal with creditors
of joint debts on which you are still listed.
This is an option when two people, usually spouses or ex-spouses, have
common joint debts.
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