Issues to Consider Before Becoming Your Former Spouse’s Creditor

Finding an equitable division of assets in a divorce isn’t always simple. In many cases, one spouse may want to take one of the couple’s higher-value assets for emotional or logistical reasons, but they’re unable to buy out the other spouse’s share of that asset. A common example is that of the spouse who holds primary residential child custody wanting to remain in the family home for the sake of the children, or a spouse wanting to remain the owner of stock options that are currently of low value but will become more valuable in the future.

In cases where a spouse lacks the funds to make a lump sum payment to buy out the other spouse, that spouse may attempt to negotiate an installment payment agreement. While some former couples are able to fulfill these agreements without incident, installment plans are often rife with opportunities for additional conflict, and they can even land you back in court. Before you agree to accept payments from your ex, discuss the agreement with your New York family law attorney and consider the following questions:

Will I be in financial trouble if my spouse is unable to fulfill the agreement?

Don’t imperil your own financial stability in order to help your spouse. This is especially important if you think there’s a good chance that your ex won’t be able to make regular payments.

Does my spouse have the financial stability to fulfill their end of the bargain?

As an ex-spouse, you’re uniquely able to say whether your spouse has the ability, both in terms of their income and maturity with managing money, to keep up with the payment plan you’ve established. If you know that your spouse’s credit score is poor, or that they’ve taken on unstable work post-divorce, then agreeing to an installment plan might not be a good idea.

Is there some other potential source of funds my spouse could use to afford this asset?

In all likelihood, you and your ex have already spent your fair share of time fighting over money. Becoming their creditor only provides more opportunities for conflict over money. If there is any other possible source for these funds, such as a family member or the sale of a car, suggest that the spouse turn to these first before using you as their lender.

Am I willing to enforce the agreement in court?

One critical question you need to be able to answer before agreeing to installment payments is whether you want to go back to court to enforce the agreement if your spouse stops making payments. This process will involve extra stress and expense, and it could mean that an installment agreement isn’t worthwhile for you.

If you need help with a complex New York divorce, contact the seasoned, professional, and trial-ready New York divorce lawyers at Rusk, Wadlin, Heppner & Martuscello, LLP for a consultation, in Marlboro at 845-236-4411, or in Kingston at 845-331-4100.