What you need to know about separation, divorce and debt
Debts, just like assets, are usually factored into a property settlement. Even if the debt is not in your name, and/or you did not know about it, it is likely to be part of the overall asset pool. If your ex does not “put the debt on the table” during the property settlement process, and it is in their sole name, the creditor is not going to chase you for payment if they default - unless it is a loan secured against an asset in your name or jointly held, such as a car or a house. If you keep an asset as part of the settlement and you are not aware of a debt in your ex’s name that is secured against it, the creditor can sell your asset (usually a house or car) if the repayments are not made. For this reason you need to check all assets and see what debts are secured against them. In Western Australia this is a matter of public record and can easily be obtained. A creditor is only interested in getting paid. If you have an asset they can sell or they can convince you to repay the debt and avoid having the asset sold, they are going to come after you. When you finalise your property settlement, make sure you have discussed all the debts with your lawyer, who is going to be responsible for them and what happens if you or your former partner don’t pay. Remember – once orders have been finalised it is usually difficult and expensive to change them, so make sure you get it right the first time.