Creditor’s Rights - Divorce Encyclopedia

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Term Definition Creditor’s Rights - the piper who must be paid.

Application in Divorce In a marital breakdown, dividing the debt is a preliminary to paying it, and creditors take no holiday when a marriage crashes on the rocks of divorce. When the ship breaks up and spouses barely keep their heads above water, creditors hover like sharks, unseen but there, and the assertion of their rights happens like a shark’s bite.

Put simply, in a debt is jointly owned.

In fashioning a settlement agreement, a divorcing couple must carefully evaluate the effect of creditor’s liens on the property rights.

A few general principles apply when divorce actions involve creditors’ rights.

In a divorce action.

When property is awarded to one spouse, the spouse who made it.

When both parties signed a note, the joint and several liability.

A divorce court cannot enter a spouse pay.

In some jurisdictions, courts have judicial discretion to block the attempts of a secured separation.)

When an unsecured interest in the property.

In general, a creditor may execute after distribution. This could well be a consideration when a couple decide who gets which automobile.

Property held by married couples as tenants by the entirety usually reverts to tenancy in common after a divorce. A creditor’s interest in the property, and it must be considered in future transfers of the property.