Your future income and expenses loom large in your mind when you consider ending your marriage. Spouses in Wisconsin typically manage debt payments with their shared incomes. However, the prospect of living on one income makes resolving your debts critically important as you prepare for divorce.
Divorce does not automatically undo joint debts
Debts are not as easily divided as assets that you own outright. A loan note with both of your names on it makes both of you responsible for payment. A lender will not care if you ended your marriage. If your former spouse fails to pay the monthly payments, then the lender will look to you for payment.
Ideally, you will pay off a debt before completing the divorce. When that is not possible, then the two of you must decide who bears responsibility for paying off each debt as you negotiate the terms of the divorce.
Monitor your credit report
If you have to trust a former spouse to keep paying a joint debt, like a credit card account, then make sure that your divorce agreement clearly specifies this condition. For your protection, close the joint account so that no more debt can be added to an account with both of your names on it. Going forward, check your credit report frequently to confirm a debt in your name has not gone into default.
Refinance a home loan
A jointly financed home that only one of you will continue to live in should be refinanced into the name of the person occupying the home. The new loan pays off the old joint mortgage and frees one person of the debt obligation. If a single person cannot qualify for a home refinance loan, then you may need to sell the house to resolve the debt.