Louisiana is a community property state when it comes to property and debt division during divorce. This means that all property and debt acquired during your marriage would (generally) be equally split upon divorce in a litigated context unless you have a legally binding agreement like a prenup or are subject to a court ruling to the contrary.
Some common examples of marital debt include mortgages, credit card debt, car loans and even personal loans taken by either spouse for the benefit of the marriage. However, it is important to note that you may still be liable even if a debt is assigned to your spouse after all of your marital debt has been divided.
Creditors are not bound by divorce court orders or agreements made between you and your spouse regarding debt repayment. They are not party to divorce proceedings and are not obligated to abide by any agreements or rulings made. Should your spouse default on a joint debt assigned to them, creditors can initiate recovery action against you as you’ll still legally owe them if your name remains attached to that debt.
Tips to protect yourself from financial liability post-divorce
It’s crucial to take proactive steps during and after the divorce process to avoid being held liable for debts you are not responsible for. First, you may want to close joint credit card accounts to prevent further debt accumulation in your name. If possible, refinance joint loans or transfer them into your spouse’s name if they are responsible for repayment.
It is also prudent to regularly monitor your credit reports to ensure all joint debts are being paid as agreed and that no new debts are being incurred. Most importantly, consider seeking legal guidance as early as possible in your divorce to understand your rights and obligations regarding debt division.