Can You Be Liable for Your Dead Ex-Spouse’s Debts in Arizona?

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 us today at (480) 351-4804 or email us for a free, confidential consultation.

Former Husband’s VA Disability Benefits Could Be Considered for Determining Arrearages Order

In a recent Maricopa County family law case (In re Marriage of Dougall), the former husband appealed a trial court’s order regarding arrearages and the enforcement of a spousal maintenance award.  (Spousal maintenance is a general term commonly used in Arizona, which is also known as “alimony” or spousal support”.)  The Appellate Court held that the former’s husband’s VA disability benefits should be considered income for determining an arrearages order.  Specifically, the Court held that A.R.S. Section 25-530 does not preclude the consideration of service connected disability benefits from determining payment of arrearages on an award of spousal maintenance.

What we learned from McDougall:  Always make sure you identify the source of either party’s income. A.R.S. §25-530 only governs a direct award of spousal maintenance or a modification of the same. Depending upon the nature of the action, disability benefits may be considered as income for the purposes of determining arrearages.

Not sure as to whether or not you should file for divorce?

Not sure whether or not its the right time to file a divorce? Even if you are sure that there is no way to save your marriage, there are some things you should do before filing for divorce that are smart and will help you in the long run.  Over the next couple of days, we will give you some pointers that will hopefully help you out.

So, Pointer Number 1:  Everyone makes some common mistakes.  An attorney will be able to give you a reasonable idea of what it will cost to divorce so you can be prepared financially to handle it.  In reality, a lot of the cost of divorce is determined by the actions of the parties involved, not the attorney.  If you fight over everything, the ultimate costs incurred will increase up from any initial estimate.)  

Also, an attorney can advise you on actions you should and should not take before filing that may affect the outcome of your divorce.  For instance, whether or not to leave the marital home.  Finally, an attorney can give you an idea of what to expect after you file and during the divorce.  The unknown is a lot scarier than if you know what to expect.