If you are one of the many Americans who are contemplating divorce, let me ask you two questions: How will you and your former spouse split your debts? What will you do if your ex is unable to pay his or her share of the divided debt?

It is important to understand that you and your soon to be ex are both responsible for any debts you have signed together like joint credit cards, mortgages, tax returns, or loans. You should also be aware that each state has a different way of handling debt in a divorce. In order to determine who is responsible for repayment, certain states will look at when the debt was incurred, who acquired the debt and the purpose of the debt. However, some states take all the property that has been acquired during the course of the marriage, add it up, and allow a judge to decide how the marital debt will be split. However, if you are in a state that considers only property acquired jointly, the judge will generally consider who incurred the debt and who is in the best position to be able to repay the debt. Still other states assume that debts incurred before the divorce are marital debts. If you reside in a community property state, any debt you or your spouse incurred during the marriage, regardless of who actually signed for the debt, is a marital debt for which the creditor can hold you both liable. No matter what the laws in your state are, you may be affected by the separation of debt in areas such as spousal support, child support, and division of property.

It is very important to note that even though some divorce lawyers will tell you that your creditors will honor a divorce decree that states you are no longer responsible for debts assigned to your ex; it may not always be true. Some creditors may honor the divorce decree but most, if the debt remains unpaid or goes into default, will pursue any means necessary to establish a payment. This means that they may pursue you for a debt that has been assigned to your spouse in the divorce. They may also begin to report the negative marks on your credit report, or decide that they would like to file suit against you on the outstanding debt.

I want you to understand why this is allowed to happen. The bottom line is: a creditor views debt acquired by both spouses during marriage or debts incurred on a joint credit card or line of credit during a separation (and very rarely debts acquired after the divorce) as the responsibility of both parties. Creditors do not care how the divorce court assigns the debts; they just want to be paid.

Here is some necessary information that everyone should know before filing for divorce:

- If you do share joint credit cards you should cancel them as soon as you know you would like to end the marriage. This will help ensure the balance does not increase. The best way to get an idea of exactly what you will be dealing with is to request a joint credit report from all three of the major credit reporting agencies. After you have cancelled the joint cards you should open a new credit card in only your name so that you can begin to build your individual credit score. Just a reminder – don’t forget joint items such as department store charge cards and/or service station cards. It should also be noted that a creditor cannot close a joint account just because of a change in marital status, but can close a joint account by the request of either spouse. You should also be aware that the creditor does not have to change joint accounts to individual accounts.

- If you have a joint mortgage or home equity loan or line of credit, the lender may require you to refinance in order to remove your ex’s name from the title or deed.

- If you are required to pay a portion or all of the debt incurred during marriage, you may want to think about contacting the lenders on these accounts to see if you can negotiate a lower interest rate. A lot of companies will offer you a lower interest rate if they think there is a possibility they could lose your business completely.

- If you do have joint debts you may want to think about borrowing money in your own name to help pay it off. When you do this you take a joint debt and turn it into an individual debt that only you are responsible for.

- You should be aware that your credit card, bank, or mortgage companies are not bound by your divorce decree. Whoever has signed for the debts (usually both of you) is responsible for re-payment no matter who filed for divorce.

- If you and your spouse have filed a joint tax return that you are unsure is correct, you will want to talk to your divorce attorney about adding a clause to the divorce decree that states whoever is responsible for the errors should be responsible for paying the taxes due or the penalties.

- If you are stuck with debt you cannot afford you have options. A viable debt settlement company could help you reduce the debt owed by 40-60% and have you out of your marital debt in 12-36 months.