If your divorce decree orders your ex-spouse to pay off certain debts that were in both your names -- like joint credit cards and car loans -- don't celebrate just yet. Wait until it actually happens. This is why you need to proceed with caution:
1.) Your divorce decree lays down the law for you and your ex, not your creditors.
The divorce decree is only binding for you and your spouse -- it can't be enforced against a third party. What that means in practical terms is that any debt that's in both your names is still in both your names until it's been paid off. Your ex-spouse may be responsible to the divorce court for paying the bills, but you're still responsible to your creditors.
If there's an unpaid bill that has your name on it, either alone or jointly with your ex-spouse, the creditor is free to pursue you for payment. Your credit can also end up damaged as a result.
2.) You can quitclaim the deed to a house, but that doesn't get you off the hook for the mortgage.
Another area of confusion for the newly divorced surrounds the status of real estate, like the family home. If you agreed to let your ex-spouse keep the house either because it didn't have enough equity to be worth the hassle of selling it or in exchange for something else you wanted, you may have signed a quitclaim deed.
All that does is end your legal rights to the property. It doesn't end your legal obligation to keep paying for it. If your ex-spouse falls behind on the mortgage, the bank is going to expect you to pay. The fact that you don't even own the house any longer doesn't matter to the bank.
3.) You can take your ex-spouse back to court over the issue, and you should.
Ideally, you should never finalize your divorce until all joint debts are paid off, you really shouldn't hand over a quitclaim deed until your ex is ready to remortgage the place in his or her name alone.
However, that might not always be an option, especially if the debt is significant or your ex-spouse's income isn't enough to convince a bank to refinance. That can leave you in an agonizing situation for several years where all you can do is wait and hope that your ex-spouse lives up to the financial obligations spelled out in your divorce.
If he or she doesn't, the only option you can take to protect your credit is to pay the bills yourself and take your ex back into court. The provisions in the divorce regarding financial obligations is still binding, even years later. Ask the court to order your ex-spouse to pay court costs and attorney fees as well as anything you've paid off.
Assuming that the court agrees to the request, you'll essentially become your ex-spouse's creditor. You can ask the court for a lien against your spouse's property until the debt is repaid and you might even be able to garnish his or her wages to collect what you're owed.
Make sure to speak to a lawyer from a firm like Grenadier, Starace, Duffett & Keisler, PC if you have any questions regarding your divorce or your marital debts.
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