The state of Colorado is an ‘equitable distribution’ state. In equitable distribution states, the court will assign debt responsibility in a way that is fair under the specific circumstances of the couple’s situation. Typically, debt belongs to the ex-spouse whose name is on it. That would leave you on the hook for your debt, and your spouse on the hook for theirs. Problems arise when a spouse has been ordered to make payments on a debt that’s not in their name or one that’s held jointly.

No matter how the court divides up the debt, the banks still expect you to pay the debts in your name. The original credit card agreement on loan contract supersedes a divorce degree, at least in the bank’s eyes. The division of debts can create problems and disagreements, and your credit is affected if and when your ex-spouse doesn’t keep the payments up on any accounts that include your name. You can take legal action against a spouse who doesn’t abide by the court order, however, by the time you get to court, your credit may already have been ruined.

Try to get the debt in the name of the spouse who’s responsible before the debt is finalized. This won’t be easy and requires both of working together, but the hard work will be necessary to get you off the hook for debt that’s not yours. For credit card debt, that may mean transferring balances to other credit cards or consolidating the balances with another loan. Major loans like mortgages and car loans are more difficult and often require refinancing the loan into just one person’s name, i.e. the person who’s keeping the asset. If the divorce has already been completed, the lender may allow you remove your name from the loan and replace it with your ex spouse’s name. You may have to show them the divorce decree stating your ex-spouse is responsible for the mortgage payments. If this doesn’t work, talk to your attorney about having the judge the asset to be sold and the proceeds to be used to pay off the loan to prevent default.

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