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Indemnity AgreementsHere's the way a typical indemnity agreement would be worded in a divorce settlement agreement. The indemnity part is in red:
Think of an indemnity as a promise that "I'll protect you." The indemnitor is saying in effect that "I'll pay this debt. And if for any reason I don't, I'll make sure you don't experience any harm as a result of my failure to do what I promised to do." The primary problem with an indemnity is that it's binding only as between the husband and the wife, not on third parties. So in the example above, if the Husband failed to pay the loan on the car, the loan company could still come looking for the Wife, and the Wife would still be legally obligated to pay the debt. The Wife could always sue the Husband, but first she has to find him, then she has to get a judgment, and then she has to find something he owns that she can seize to pay the judgment. It's not a pleasant prospect. There are a couple of things you and your spouse can do to give you at least a better handle on whether you have continuing exposure for debt. All of this needs to be in writing:
Indemnities are helpful but incomplete. The best course by far is for the two of you to get disentangled as thoroughly as possible, as quickly as possible. |
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