If you default on a debt after your divorce, the consequences will depend on who is legally responsible for the debt, whether it was joint or separate, and the terms of your divorce decree. Even if a court assigns a debt to one spouse, creditors may still hold both parties liable under contract law, potentially leading to credit damage, collection actions, or legal consequences.

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Who Is Responsible for the Debt After Divorce?

Several factors determine who is responsible for a debt after divorce. One of these is whether it is a joint or separate debt.

• Joint Debt – If both spouses signed for a loan or credit card during the marriage, they are both legally responsible for repayment, regardless of what the divorce decree states.
• Separate Debt – If the debt is in only one spouse before the marriage, or was classified as separate property, then only that spouse is responsible for it.

During a divorce, the court assigns responsibility for debts through the property division process. However, a divorce decree does not override the original contract with a lender. If the court orders your ex-spouse to pay a joint debt but fails to do so, the creditor can pursue you.

Consequences of Defaulting on a Debt After Divorce

Missed payments on joint debts negatively impact both spouses’ credit, even if courts assign the debt to one party. Late payments, charge-offs, and collections remain on your credit report for seven years, making it harder to get loans. Creditors can take action to collect unpaid debts, including:

• Collection Calls & Letters – Creditors or collection agencies may contact you aggressively for payment.
• Lawsuits & Wage Garnishment – If a creditor sues and wins, they may obtain a judgment allowing them to garnish wages, freeze bank accounts, or place liens on property.

Even if the court orders your ex-spouse to pay a debt in the divorce, creditors can still hold you responsible for joint accounts. If they default, you may have to pay the debt or take legal action against them for violating the divorce decree. Defaulting on a secured debt, such as a car loan, can cause the lender to repossess the asset. If both spouses’ names remain on the loan, defaulting can put both parties at risk of losing assets.

How to Protect Yourself After Divorce

If you are concerned about defaulting on a debt after divorce, there are many options to take into consideration. Firstly, whenever possible, close or refinance joint accounts to remove your name from debts assigned to your ex-spouse. This prevents creditors from pursuing you if your ex defaults. Regularly checking your credit report for any missed payments, collections, or accounts still in your name is also a good idea. If you see errors, dispute them with the credit bureaus. Additionally, if you’re struggling to pay a debt, try negotiating with the creditor for a reduced settlement amount, lower monthly payments, or a hardship plan or deferment.

If your ex-spouse fails to pay a debt that the divorce decree assigns them, you may be able to:

• File a motion for contempt – This asks the court to enforce the divorce decree and hold your ex accountable for nonpayment.
• Request indemnification – Some divorce decrees include indemnity clauses, requiring one spouse to reimburse the other for debts assigned in the divorce.

Ultimately, a debt in a divorce decree must be paid off, or the person who defaults can have serious financial consequences.

Creek County Family Law Attorneys

Defaulting on a debt after divorce can lead to credit damage, legal actions, and financial hardship, even if your ex was assigned the debt in the divorce decree. Because creditors are not bound by divorce agreements, joint debts remain the responsibility of both spouses unless properly closed or refinanced. If you are facing debt issues after divorce, our team at Creek County Attorneys can help. Call us at 918-209-3709 for a free and confidential consultation or ask a legal question here.