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Be warned: Divorce does not cancel your debt

During your divorce, you and your ex split up some pretty serious debts, along with your assets. You divide credit card debt down the middle. You take the car and agree to pay off the loan. Your ex, meanwhile, takes the house. You still have a mortgage on it, but your ex agrees to keep things simple and just make those payments.

You move into your own apartment and start your own life in Greeley. Two years later, you've put that time in your life behind you. You're dating again, you have your own place to live and you're moving forward with your career. Everything seems to be going well. You even paid off that car loan and the credit card debt, so you have some financial freedom.

Then you get a call from your mortgage lender. They tell you that you're four months behind on your payments and you owe them thousands of dollars. They want you to pay up.

Whose obligation is it?

The first thing you tell them is that it's not your obligation. You got divorced, you explain. Your ex is going to pay the mortgage. You haven't lived there in years.

To your shock, the lender doesn't care. They still want you to pay. Your ex stopped making the payments and someone needs to. They don't care that you got divorced. What happened?

The real issue here is that your loan agreement still exists and it still has your name on it. Years ago, when you applied for the loan, you agreed to pay it back.

For the lender, that's all they care about. You could be married or single. You could have gotten divorced and remarried 10 times. They do not care. According to the contract you signed with them, you agreed to pay. No one is paying. That means you're obligated to do so.

The divorce agreement

In this case, your divorce agreement merely lays out what you and your spouse should do. It does not free you from any obligations. If your ex stops paying, you still have to do so. Don't bother telling the lender what your divorce agreement says. They didn't sign that paperwork.

To really get out of debt, you need to get your name off of that loan. You can do it during a divorce by selling the home to someone else or by having your ex get their own mortgage without you. They basically buy out your share. If you agree to split up the debt, though, then you're just counting on your ex's good will.

As you can see, it is incredibly important to understand the real legal ramifications of a divorce and what steps you must take to protect yourself.

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