Though the family law court can divide community assets and debts between the parties, the Court’s rulings have no impact on the rights of creditors. It is not uncommon for creditors to go after one of the spouses for unpaid debt, because the party awarded the debt in the divorce has failed to pay. This happens most frequently with credit card companies who are extremely aggressive in their debt collection practices. The creditor is not bound by the terms of the divorce except to the degree that debt acquired after legal separation or divorce is no longer community debt. As a result, the creditor/credit card company is legally entitled to seek collection from either or both spouses.
If one party fails to pay debt as ordered by the Court, the other party can file a Motion to Enforce the Order. The Court will order the party to abide by the Order but even this does not relieve the innocent party from his or her responsibility to the creditor. The only way to fully protect oneself against community creditors is to pay the debt in full. This is often not possible due to the financial condition of the parties.
Some protection though thin is gained by assigning the debt to the party whose name is on the debt instrument. The greatest protection can be gained by insuring that the debt is divided in such a way that each party can service his or her assigned debt. It does no good to get a lopsided debt settlement in the divorce if you ended up paying the debt anyway. If none of this is possible, bankruptcy may be the only solution and the only way to protect oneself against the debts of the other party. However, any separate debt relieved by bankruptcy that places a burden on the other party may be ordered paid by the Court renewing those debts to the innocent party.
Decisions on how to deal with debt can be complicated and stressful. There are often no good choices, only acceptable choices which should be made with the utmost consideration of the consequences.