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Making wise decisions when it comes to dividing joint accounts

On Behalf of | Jun 8, 2016 | Property Division

It can be advantageous for married partners in Arizona to apply for credit cards, mortgages and other loans together. This is because lenders look for financial security in the parties they extend credit to and couples often generate more income together than the partners can on their own. However, when couples with joint credit accounts choose to divorce they can run into challenges when it comes to deciding how those financial devices will be managed.

Loans held by an individual married person are generally considered the property of the named individual, but if money from those loans is used for the benefit of the marital partnership then the loans may be viewed as the martial debts of the partners. In such a case, individual loans may suffer the same challenges as those created as the obligations of both marital partners.

However a joint account arises, a person should be proactive about determining how that account will be managed after a marriage ends. If one partner trusts that the soon-to-be ex-partner will handle payments on the account, that trusting partner may run into problems with the creditor if the ex-spouse mismanages the account. Property division documents and divorce decrees generally have no bearing on creditors as they are not parties to those agreements and as such divorced persons who share joint accounts can still be liable for their marital debts if their former partners do not meet the financial obligations.

One way to avoid these problems is to close joint accounts before divorcing. If an individual shares no debts with a partner then they may avoid running into these and other financial pitfalls associated with divorce.