What is a Hold Harmless Clause in a Divorce Decree?

A hold harmless clause in a divorce decree is a legal provision protecting one spouse from financial liability for certain debts or obligations assigned to the other spouse during the divorce. These clauses are often in divorce agreements to clarify each party’s financial responsibilities and ensure that one spouse is not accountable for debts or obligations they did not agree to take on. Whether it’s a credit card, car loan, or mortgage, this clause is necessary in a divorce decree. Here we will talk about how it works and what you can do when the clause is breached.

How Does a Hold Harmless Clause Work?

Hold harmless clauses create a legal agreement requiring the spouse assigned a specific debt or financial obligation. This requires them to fully cover any fees, penalties, or payments incurred by the other spouse if creditors pursue them for that debt. For example, if both spouses co-signed a loan and the assigned spouse fails to make payments, the hold harmless clause requires the responsible spouse to reimburse the other for any financial harm caused by creditor actions.

These clauses serve an essential role in divorce agreements by clearly defining which spouse is responsible for particular financial obligations. This not only helps avoid misunderstandings, but also reduces the likelihood of disputes after finalizing the divorce. This protection is particularly valuable when dealing with joint debts, such as mortgages, credit cards, or tax liabilities.

Common Situations Involving Hold Harmless Clauses

Hold harmless clauses are applicable in many different situations, with some common ones being:

Debts: When dividing marital debts, such as credit card balances, the clause protects the spouse not assigned the debt.

Taxes: If one spouse has tax liabilities from joint tax returns, the clause ensures the other faces no financial burden.

Indemnification for Legal Fees: A hold harmless clause may require one spouse to cover legal costs if the other spouse is sued or otherwise held liable for debts assigned in the divorce.

While a hold harmless clause is a valuable tool for financial protection, it has limitations. If the spouse responsible for the debt fails to meet their obligations, the other spouse can take legal action. It’s also important to remember that creditors are not bound by the terms of a divorce decree. They can still pursue any individual listed on a joint debt, regardless of the clause.

Breach of a Hold Harmless Clause

In the event that your former spouse breaches the clause, there are certain actions you can take. One in particular is filing for contempt in your divorce case. It’s important to have evidence of the breach in order to back up your claims. Once the judge is able to review the facts and findings, they will likely rule in your favor and order the offending party to reimburse you as well as pay for the legal costs you incur fighting for it.

Another option is a civil suit. This option would require you to petition the civil court to award you the monetary damages as well as court costs associated with the filing. This will require you to have your ex spouse served to show up to court. Once the court date happens, you can receive a judgment against your ex, and can move forward with options such as a garnishment or asset hearing.

While both of these options are valid, it’s important to talk with an attorney to see which option is best for you. A family law attorney will be able to point you in the right direction on which one is more advantageous to your particular circumstances.

Tulsa County Divorce Attorneys

A hold harmless clause in a divorce decree protects each spouse from financial liability for the other’s debts. While it provides protection, it’s not a substitute for proactive steps such as closing joint accounts or refinancing debts individually. A family law attorney can help protect your financial interests and ensure the terms of your divorce agreement are clear. Contact Kania Law Office at (918) 743-2233 or online for guidance tailored to your situation.