Family Law

How Is Debt Divided in a Divorce?

By Aaron Thomas, Attorney
While most couples are focused on dividing assets in a divorce, dividing debt can be just as important. This article explains how different types of debts are divided during divorce.

In a divorce, the spouses must divide their marital estate, including both assets and debts. Dividing marital debt can be just as important as dividing assets—both contribute to your net worth post-marriage. Read this article to learn more about how your marital debts may be divided between you and your spouse in a divorce.

Equitable Division Versus Community Property

In community property states, like California, courts view debts incurred during the marriage as joint debts, owed by the couple. First, the judge will determine whether a debt is a marital debt or a separate debt. Debt incurred by one spouse prior to the marriage is generally considered that spouse's separate debt. Debts taken out during the marriage are typically marital debts. For example, if a spouse had student loan prior to the marriage, it will likely remain the debt of that spouse after divorce. If spouses use a joint credit card during the marriage, that credit card debt is marital, and the credit card company can go after either spouse for payment. If a spouse had a mortgage prior to the marriage, but refinanced the mortgage during the marriage, a judge might determine that the mortgage is now a joint debt.

Divorce courts in community property states will divide marital debt between the spouses. For example, the balance on a credit car used for family vacations during the marriage is likely to be divide between the spouses. On the other hand, a husband who uses his personal credit card on an adulterous affair will likely shoulder the entire debt.

In equitable division states, like Georgia, judges divide a couple’s debt equitably—meaning fairly—between the spouses. In other words, the debt division might not be 50/50, but the court will try to divide the debt in a manner that is fair, considering the couple’s circumstances. Courts consider a number of factors when determining what constitutes an equitable division of the marital debt, including:

  • each spouse’s income and ability to repay the debt
  • which spouse incurred the debt, and
  • the reason for the debt.

Special Circumstances in Dividing Debt

Courts have a lot of discretion when dividing assets and debts during a divorce. Judges will treat certain types of debt differently depending on the facts of each case. For example, if one spouse receives the marital home in the divorce, they’re likely to take the mortgage along with that property. Similarly, debt attached to a specific asset, like a vehicle, will typically follow the spouse who gets the property in the divorce.

Student loans are another specific type of debt that courts may look at closely when determining how it’s split. Often, a judge may assign student loan debt to the spouse who took out the loan. However, if the spouse took out student loan debt at the beginning of the marriage and used the education to earn income to support the household during the marriage, the court may divide that debt between the spouses upon divorce. On the other hand, if a spouse got the degree towards the end of the marriage, and the education received never actually benefited the couple, the spouse who took out the student loan may end up with the entire debt after divorce.

Courts may also look at each spouse’s ability to pay off debt after the divorce. If one spouse earns far more money than the other spouse, the court may assign that spouse more debt based on his or her ability to pay it off after the marriage ends.

Many couples use their divorce as an opportunity to pay off all debt. Often during a divorce, a couple may sell their marital residence, particularly if each spouse plans on downsizing their living space. These couples can choose to use the proceeds of the sale of their home to pay off consumer debt before dividing the proceeds of the house sale. Rather than figure out which spouse is going to pay off certain debts, both spouses can rid themselves of debts and start over with a clean slate after the marriage ends.

If you have questions about how your debt will be divided upon divorce, you should contact a local family law attorney for advice.

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