How to Assume a Spouse's Debt

Assuming debt often requires refinancing loans.

Assuming debts from your spouse is a process that often happens during divorce proceedings. Debt must be divided, and in many cases, both spouses' names are on the loan or credit cards. Creditors do not honor divorce orders in which one party has verbally agreed to assume the debt that is in both names. It is always important when assuming debt to have the debt transferred, solely, into the name of the party who is willing to assume the debt.

Instructions

1. Agree on the debts you are willing to assume. Create lists based on account types. Place credit card debt on one list, and all other types of debt on the second list.

2. Take the list with the credit card names, and contact each credit card company. Ask to have your spouse's name removed from the account. Confirm with the representative that she will not be held liable for the credit card account and is not linked to the account in anyway.

3. If the credit card company will not remove your spouse's name from the account, ask the company to open a second credit card account in only your name. If this is an option, open a new card, and transfer the balance from the old card to the new card. Once the balance has been transferred and the joint account has a zero balance, close the joint account. Alternatively, transfer the balance to other existing credit card accounts in your name that have the available credit.

4. Take the list with your other joint accounts, and contact each creditor. For mortgages and auto loans, you need to request to refinance the loan in only your name. The lender will request an application and review your income and expenses to determine if refinancing is possible. Follow all steps requested by the lender to complete the process. For mortgages and auto loans, your spouse will have to sign documents to release his interests in the property.

Tips & Warnings

• Verbally agreeing to take on your spouse's debt does not take away the legal obligation of your spouse's responsibility for the debt. Your spouse's name must be removed from all joint accounts to remove his responsibility for the account.

References

• Dad's Divorce: How to Protect Your Credit Score
• Long Okura: Spouses Liability for Debt
• Credit Champion: Divorce Debt