Tuesday, July 1, 2014
A divorce agreement on how a couple's debt will be divided and paid may not shield one of the individuals from their ex-spouse’s debt after the ex dies, especially in community property states. This is because the agreement is made by the couple and not with the creditor, and as far as the creditor is concerned the surviving ex-spouse still has the responsibility to pay the debt accrued during the marriage. Entering into an agreement with the creditor to release one spouse from the debt may avoid this problem, but the creditor does not have to agree and likely will have little motivation to do so.
See Jeanne Sahadi, Your Dead Ex-Spouse’s Can Become Your Problem, CNN Money, June 26, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.