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What Happens With Marital Debt With Divorce?

Debt can be a contentious issue when couples divorce. The treatment of marital debt during a divorce can vary depending on various factors, including jurisdiction, the specific laws governing divorce, and the unique circumstances of the couple. However, here are some general considerations regarding marital debt in divorce, as seen below.

What Is Marital Debt? Marital debt typically refers to debts incurred by either spouse during the marriage. It can include mortgages, credit card debt, personal loans, car loans, student loans, and other liabilities. 

Separation Period: Debt responsibilities can be determined during the time leading up to the divorce once the party splits up.

Equitable Distribution: In jurisdictions that follow equitable distribution principles, marital debt is often divided fairly and equitably between spouses. This does not necessarily mean an equal 50-50 split, but rather a distribution based on various factors, such as each spouse's income, earning capacity, financial contributions, and overall financial circumstances.

Joint Liability: Regardless of the division of marital debt in the divorce decree, both spouses may still be jointly liable for the debt in the eyes of creditors. This means that if one spouse fails to make the required payments, creditors can pursue the other spouse for the remaining balance.

Negotiation and Settlement: Spouses can negotiate and reach agreements regarding the division of marital debt outside of court. They may consider various factors such as the financial situation of each spouse, their ability to repay the debts, and the value of other marital assets being divided.

Court Decision: If the spouses cannot reach an agreement, the court may step in and determine the division of marital debt. The court will consider factors such as each spouse's financial circumstances, earning capacity, and ability to repay the debts.

Separate Debt: Debt that is considered separate or individual, such as debt incurred before the marriage or debt obtained in one spouse's name alone, may be excluded from the division of marital debt. However, there can be exceptions if the separate debt was used for marital purposes or benefited both spouses.

It is crucial to consult with a divorce attorney who specializes in family law in your jurisdiction to understand how marital debt is typically handled in your specific case. They can provide guidance based on the laws and practices in your area, help negotiate a fair settlement, and protect your interests during the divorce process. Speak to a family law or divorce attorney today.