Debt Responsibilities

[by0b]

California
My husband And I are seperated but we haven't made it legal nor have I decided to file for divorce as of yet. He has a business and pays our bills. lately he has had problems paying the bills. He also has a recent business judgement against his name and business. I don't want to get stuck with his problems. Will a legal seperation or divorce protect me from getting mixed up in his business legal problems.What is the name of your state (only U.S. law)?

 

[mistoffolees]

California
My husband And I are seperated but we haven't made it legal nor have I decided to file for divorce as of yet. He has a business and pays our bills. lately he has had problems paying the bills. He also has a recent business judgement against his name and business. I don't want to get stuck with his problems. Will a legal seperation or divorce protect me from getting mixed up in his business legal problems.What is the name of your state (only U.S. law)?

If handled properly, it will - to some extent. The key is that ownership of the business needs to be properly established and all the paperwork trail handled correctly. For example, if you are part owner, you need to make sure that you are transferring your share of assets AND debts to your husband.

There are, however, 2 major exceptions:
1. Any existing problems will still be your headache. If something comes to light after the divorce but the problem already existed before the divorce, you could be on the hook.
2. Any loans or other debts which you co-signed are likely to still be your responsibility until the debt is refinanced without your name (or the creditor agrees to remove your name).