When two people get married they usually accumulate a variety of assets and liabilities. When two people get divorced, they have the opportunity to decide how their joint property will be distributed and who is responsible for what debts. If they cannot or will not make these decisions together, the court will decide for them. Arizona is a community property state meaning that absent an agreement between the parties, the law dictates that each spouse is entitled to an equal share of the assets and debts accumulated during the marriage. Most people don’t realize that this includes debts.
If your ex-spouse agreed to be responsible for one of these joint debts and they passed away before the debt was satisfied, you may be held responsible. How is this possible? You assumed that you were completely covered by the agreement you entered into with your spouse. Unfortunately, you are not. This is because the creditor was not a party to that agreement. No one made an agreement with the creditor to collect the debt from your ex-spouse alone. The creditor still has the ability to go after anyone who may be responsible for the debt notwithstanding the agreement.
Worse yet is that if you find yourself in this situation you don’t have a lot of options. You might not have any other choice than to pay the debt and make a claim against your ex-spouses estate. If the estate has no money to distribute, you are out of luck.
Luckily you can avoid this situation with a little pre-planning. Once it is determined who is responsible for what debts in your divorce proceeding, you should seek a novation or an accord and satisfaction for any you are not responsible for. A novation or an accord and satisfaction will release you from responsibility for the debt. These arrangements should be sought at the time of the divorce.
Contact the Arizona attorneys at Nirenstein & Garnice if you are having an issue with the debts of an ex-spouse or need advice on any other family law issue. Call (480)351-4804 for a free consultation today.