While arguments about money may have been commonplace prior to divorce, couples in Rhode Island may be surprised to find out that their financial disagreements can carry on even after the divorce is final. In fact, simply signing the divorce decree may not be enough to transfer certain types of assets.
It is not uncommon for married couples in Rhode Island to share joint financial accounts, such as credit card accounts or a home mortgage. Depending on the circumstances, even after a divorce, these accounts could still be in the name of both partners, even if the divorce decree allocates the account to just one spouse. That means that if the account is still in both spouses' names, and one spouse stops making payments for malicious reasons or otherwise, the other spouse may still be responsible for the balance.
To avoid scenarios like this, the account may need to undergo a few changes, including removing one spouse from the account so the account is in the other spouse's name only or closing the account entirely, and then have one spouse alone re-open the account. What to do depends on what the lender allows in situations like these.
As mentioned, fights about money are often one of many reasons why a couple divorces. Unfortunately, these fights can continue during the divorce process and beyond. For instance, one spouse may be unwilling to sell a valuable marital asset, such as the family home. If so, both spouses are still responsible for the mortgage. To avoid missed mortgage payments, traditionally the spouse who is keeping the family home would refinance the mortgage so that only that spouse is responsible for it.
A recently divorced individual in Rhode Island may find that they are facing some pretty significant financial challenges. However, divorce could actually be a way to help one's credit in some circumstances. It allows a spouse the opportunity to rebuild his or her finances from scratch. Property division can be difficult to understand, both in its present and future implications. Simply signing the divorce decree may not be enough to transfer an asset to one spouse alone. Make sure you take all the proper steps during property division and after the divorce for your financial affairs to be in order.
Source: U.S. News Money, "5 Ways Divorce Affects Your Credit," Paul Sisolak, April 14, 2016