CDA CDA Debt Division & Credit Issues in Divorce

Question 1

In most U.S. states, which type of debt incurred during marriage is typically considered marital debt?

Accepted Answer

Debts incurred for marital benefit regardless of whose name is on the account

Answer

Only debts in both spouses' names

Answer

Only mortgage debt on the marital home

Answer

Only credit card debt with balances over $5,000

Question 2

What is a 'hold harmless' or indemnification clause in a divorce decree related to debt?

Accepted Answer

An agreement where one spouse assumes a debt and protects the other from creditor claims

Answer

A court order freezing all joint accounts during proceedings

Answer

A lien placed on marital property to secure debt repayment

Answer

A penalty imposed on a spouse for hiding marital assets

Question 3

Why is a divorce decree's debt assignment NOT binding on third-party creditors?

Accepted Answer

Because the divorce decree is a contract only between the spouses and not binding on creditors

Answer

Because creditors must separately approve all divorce settlement terms

Answer

Because state law prohibits such assignments to protect the credit industry

Answer

Because federal bankruptcy law supersedes all state divorce decrees

Question 4

When divorcing spouses have a joint mortgage but only one will keep the home, what is the recommended action for the departing spouse?

Accepted Answer

Refinance the mortgage solely into the keeping spouse's name to release the departing spouse from liability

Answer

Execute a quitclaim deed to transfer title and consider the matter resolved

Answer

Have the divorce decree assign all mortgage obligations to the keeping spouse

Answer

Immediately pay off the remaining mortgage balance at closing

Question 5

What happens to a joint credit card account when one spouse is ordered to pay it in the divorce decree but fails to do so?

Accepted Answer

The other spouse's credit may be damaged and the creditor may pursue them for repayment

Answer

The credit card company must forgive the debt under divorce protection statutes

Answer

The divorce decree automatically closes the joint account upon finalization

Answer

The creditor is required to sue the assigned spouse exclusively before pursuing others

Question 6

Which type of debt is most likely to be characterized as separate (non-marital) debt not subject to division?

Accepted Answer

A student loan taken out before the marriage for pre-marital education

Answer

A mortgage taken out jointly during the marriage for the marital home

Answer

A credit card used primarily for household expenses during the marriage

Answer

A car loan for a vehicle regularly driven by both spouses