Financial problems may plague a couple while married but may even continue once they have divorced. Identifying all debt and determining which person will be responsible for repaying which debt may create challenges during a divorce.

Spouses should understand how creditors view debt liability relative to what their divorce decree outlines to protect their financial futures.

The creditor view of debt responsibility

Bankrate explains that a credit account opened by spouses together is considered the joint responsibility of both spouses given that both names appear on the account. When one spouse agrees to repay a credit card debt, for example, after the couple divorces, this may be documented in the divorce decree. If, however, the account continues to reflect both parties’ names, the creditor may still consider both parties responsible for the debt.

Mortgage lenders and home choices

According to The Mortgage Reports, home loan lenders may follow the same approach to assign responsibility for the debt as do their credit card counterparts. This fact may contribute to many couples’ decisions to sell their homes when they get divorced.

Collection efforts and credit reporting

Late or missed payments on the part of the person who agreed to repay the debt may result in the creditor pursuing repayment from the former spouse, despite the terms of the divorce decree. Negative reports to credit bureaus may be made by banks or other creditors to both spouse’s accounts. Any foreclosure actions may also reflect on the credit reports of both spouses even when one person was identified as liable for the mortgage under their divorce agreement.