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Advantages of an Indemnity ClauseAn indemnity clause is something you don’t hear about a lot when it comes to the typical divorce. When you file for divorce, there are so many things to remember that getting down into the weeds with a term like this can be daunting, but if you aren’t sure about your spouse’s committal to the process, then it’s highly recommended. Here are the four key advantages to such a provision.

One: It Protects Credit Rating

When divorce papers are finalized, the judge will set forth terms for how marital debt should be repaid. Unfortunately, this often requires both of you to pay your fair share, and when one doesn’t hold to their end of the bargain, it can badly affect the innocent party’s credit score, UNLESS there is a properly worded indemnity clause in place. While the clause may not protect your rating directly, it does allow you to be compensated for your share of the unpaid monies that you’ve been forced to take on as a result of your spouse’s inability or unwillingness. This, of course, should be handled by an attorney, but it’s a good thing to know about even if you foresee a collaborative divorce.

Two: It Ensures You Are Compensated

As alluded to in number one, if you’re holding to your end of the bargain but your spouse isn’t, then the indemnity clause will ensure that you aren’t left holding the bag for all marital debts. You may still wish to make whatever payments you can. As long as the stipulation has been handled properly, you’ll get that money back.

Three: It Grants You Peace Of Mind

Even if you trust your spouse to hold up to his end of the bargain, you can’t always be assured that he is capable of doing so in the immediate future. Job loss, layoffs, or a change in salary, are all factors that can keep him from paying. By having the indemnity clause in place, you protect your future interests, and that, in turn, is enough to give you appropriate peace of mind.

Finally, It Shows You Mean Business

With an indemnity clause, you’re laying it on the table, in black-and-white, what is expected of your spouse with regard to marital debt once the divorce forms are final. You’re also establishing a legal instrument that will enlighten him to the fact that he is legally obligated to pay a share of the debt and/or to compensate you for any unpaid portion that was his responsibility. By taking this step, he realizes it’s me-against-the-court and not just me-against-my-ex.


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