When couples end their marriage, they often have many questions about what will happen to their possessions. What will happen to their prized possessions? Who will keep their house? How will the court divide their savings, including their retirement savings?
However, couples going through the divorce process will also address other details, including what will happen to their debts. What happens to your debt in divorce?
The court divides debt similarly to the way it divides other property.
In the same way that the court will generally view property acquired before your wedding day as separate, debts acquired before your marriage started will generally be one person’s responsibility. Debt acquired during your marriage — like a mortgage for a house you purchased together — is generally marital debt, and you will share responsibility for it.
Just like property like your house or savings, the court will divide marital debt according to what is “just” or fair. This means that the amount of marital debt that is your responsibility after your divorce could depend on a variety of factors, including:
- Each person’s contributions to the household
- Each person’s parental responsibilities after divorce
- Each person’s individual income
- The value of each spouse’s separate property
- Each person’s conduct during the marriage
Fair property division could look different for each couple. For example, the spouse who will keep a car may also become responsible for the loan for that car. In other cases, if one spouse will have significantly less income than the other after they finalize their divorce, the other may take on a greater share of the debt.
The debt you take on during property division can have a significant impact on your finances. It can be important to carefully consider your legal strategy to protect your financial health as you begin life after divorce.