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John B. D'Alessandro
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Becoming a Creditor to an Ex-Spouse

house being divided

For many couples, creating a fair and equitable division of marital assets is the most challenging aspect of their divorce. There are many reasons why a spouse might want to receive certain high-value assets without being forced to liquidate them in the split. For example, the parent with residential custody of the couple’s children may want to retain the family home for the sake of the children. Alternately, a spouse with a generous employer-backed retirement account that will soon vest may want to avoid liquidating the account and remain the sole owner of the account.

Ideally, the spouse who wants to retain a high-value marital asset would be able to make a lump-sum payment to buy out the other spouse’s interest. When the spouse lacks large amounts of cash for this sort of payment, they may request to buy out their share in installments to be paid over the course of months or years. Installment agreements can be successful, but there is also a high risk of such agreements going sideways. Deciding whether or not you should become your former spouse’s creditor is a choice you should make carefully. Consult with a seasoned New Jersey family law attorney and consider some of the following questions before agreeing to an installment payment plan as part of your divorce settlement.

Will my spouse be able to fulfill the agreement?

You know better than anyone whether your spouse is sufficiently responsible with money and financially stable enough to keep up with an installment agreement. Consider your ex’s credit score and income source before agreeing to an installment plan.

Is there anyone else from whom my spouse could borrow the money?

If there’s any possible lender for your spouse other than you, suggest they use that source instead. There’s no reason to introduce additional opportunities for conflict in an already-challenged relationship if it isn’t necessary.

Do I want to return to court to enforce the agreement if my spouse is unable to keep up with their payments?

Any installment agreement with an ex should be in writing, so that it can be enforced in court if necessary. That said, before entering such an agreement, you should be prepared to enforce the agreement in court. Ask yourself seriously whether you’re willing to go back to court and incur the accompanying stress and expense.

For skilled, professional, and knowledgeable legal help with a New Jersey divorce, contact the Union family law attorney John B. D’Alessandro at 908-964-0102.

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