What happens to our debt in a divorce?

Among the issues which must be decided in a divorce is the division of marital debt.  Marital debt is any debt incurred since the date of the marriage.  Generally, debt incurred by either spouse before the marriage remains that spouse’s sole responsibility. 

State law governs the divorce process.  So, how debt may be divided varies from state to state.   Generally, however, there is no requirement that marital debt be divided equally between the parties.  Rather, the debt need only be divided equitably (fairly). 

If the parties are unable to agree on the division of debt, the judge or jury will decide this issue.  In making an equitable division of debt, the judge or jury may consider a variety of factors including:

• The current income of each spouse;
• The earning capacity of each spouse;
• How marital property has been divided;
• Whether either spouse attempted to hide assets in anticipation of or during the divorce process;
• Which spouse is at fault for the divorce; and
• Any other relevant factors. 

In instances where the parties have joint debt, both spouses remain jointly and severally liable for that debt after the divorce is final even though one spouse may have been ordered by the divorce court to pay the debt.  This means that if the responsible party fails to pay, the creditor may pursue collection efforts against both spouses.  However, the responsible party may be liable for any damages suffered by the other spouse as a result of the creditor’s collection efforts. 

If you have questions about division of debt in a divorce, you should schedule a consultation with an experienced divorce attorney in your area.