Ordway Law Group, LLC
Ordway Law Group, LLC
Divorce & Family Law

How do courts divide debt in divorce?

| Oct 3, 2019 | Uncategorized |

Two spouses going through divorce need to figure out how to divide everything. They need to determine who gets the house, any cars they share and other important assets. However, they also need to divide what they do not have, namely debt. 

Everything from credit card debt to student loan debt will come up in a divorce. Regardless of whether financial issues contributed to the divorce, both spouses will need to bring their respective debts to the table for the court to divide. It is possible for one spouse to have to continue paying off another spouse’s debts even after finalizing the divorce. Here is what you can anticipate when you divorce with debt. 

Marital or separate debt

When dividing assets, the court separates them into two categories: marital and separate. Items accrued during the marriage are marital property, which means they are subject to division. If you purchased a car or another item prior to the marriage with 100% your own funds, then it is separate property and not subject to division. The same rule applies to debt. If your spouse accrued debt during the marriage, then you both will be responsible for paying it off after the divorce. However, if your spouse has student loan debt from before the marriage, then it will be separate. 

Outside influences

The court will consider various factors when determining an equitable division of debt. For example, your spouse may have accumulated debt behind your back without your knowledge. Additionally, the court will look at your earning potential and any medical conditions that could hamper your ability to earn more money in the future. Your spouse may have went back to school during the marriage to increase earning potential and now is in a better position to pay off said student loan debt. Numerous factors can come into play, and it is vital to mount a defense if you believe you should not pay off a certain debt. 

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