Finances today are a real concern for most people, but when a divorce is involved it makes it even scarier. What happens if you are in debt when you file for divorce? Will it make the divorce more complicated? Most people acquire some debt during their marriage and it will depend where you live how the debt will be handled.

When working with debt and divorce how you deal with it can greatly affect your credit rating. If you live in a community property state, both spouses may be responsible for any debts that have been incurred. It doesn’t matter whose name is on the account or property both spouses must pay off the debt. If you live in a community property state, you can include a provision to make sure the debt is not on your hands.

If you have a joint credit account, both partners are responsible for paying off the debt. This is true even if the courts assign the debt to your spouse. If the debt is not paid off, you will be responsible for it and your credit rating can drop. Credit companies are not bound by the same laws as divorce decrees, so they can come after either spouse. Making regular payments to the account will make sure your credit rating doesn’t suffer.

It is a good idea to close any joint accounts and take off your partner as an authorized user of your own accounts. This protects you from any further debt your spouse might incur. It is a good idea to try to pay off any joint debt before the divorce is final; it will make for an easier settlement. It will also protect you from your partner withdrawing all the money from the account without your knowledge.

Any joint assets should be re-titled to one spouse or the other, or be sold off. For items like cars, if both parties are on the title you will need both signatures to sell it. The same is true for any joint property such as houses, businesses, or vacation homes.

Make sure you know what you owe on your own and jointly. Getting a credit report is an easy way to find out all debts, even ones your spouse might not have told you about. A credit report is inexpensive and important so you know what your credit rating is like.

One thing you can do to make debt easier is to negotiate a lower rate on credit cards and even store cards. Companies would rather lower the rate than have you not pay them at all. Getting credit counseling will help you figure out what you need to do to pay off debt and manage your finances better. Of course there is always bankruptcy if things are really bad, but only use this as a last resort.