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How is Debt Divided in Divorce?

Dena Standley | November 08, 2022

Nobody likes dealing with divorce, especially if involves dividing the marital debts.

Summary: When a divorce process is started, it is natural to consider how assets will be divided. However, couples facing divorce must also decide how the debts incurred during the marriage can be divided in a fair and equitable manner.

People mostly think about the assets in divorce and forget that debt must also be distributed. Sometimes, the debt division can be the most frustrating and confusing of all the divorce processes.

Debt division in divorce depends on several factors, including:

  • The state you reside in: Every state has its own rules on how debt should be divided. Generally, some states divide debts and assets equally, while others concentrate on the debts each spouse accrued during the marriage.

  • Whether you signed a prenuptial agreement: A detailed prenup will have a section addressing how you’ll handle debt with your spouse following divorce.

  • If the debt accrued is marital or separate: If you came into the marriage with debt, that does not automatically translate to marital debt. You’re still responsible for the debt you had while you were single.

Today, SoloSuit will help you learn how to prepare for divorce while in debt and everything that entails. To begin, let's look at the two ways different states handle divorce.

Equitable distribution vs. community property debt division

Community property in debt division uses the concept that debt incurred during the marriage is considered marital debt, and both spouses must be held liable for it (50/50 split). However, debt incurred separately before marriage remains the responsibility of the particular spouse. Only nine states follow the community property divorce laws. Those states are:

  1. Arizona
  2. Idaho
  3. California
  4. Louisiana
  5. New Mexico
  6. Nevada
  7. Texas
  8. Wisconsin
  9. Washington

As an example, California is a community property state. According to Cal. Fam. Code §2550 (2022), a couple’s property, including debt, should be divided equally upon divorce. The first step is for the court to decide what is separate and what is community property. Cal. Fam. Code §770 defines separate property as property owned by one partner prior to the marriage, property acquired after marriage by gift, bequest, devise, or descent to only one partner, or the profits of any item of separate property.

On the contrary, equitable distribution states view debt as a joint responsibility of the two spouses. Therefore, the debt is divided according to each spouse’s ability to pay off the debt and the spouse's responsibility for the debt. The debt split may not be equal, but the judge or arbitrator should ensure it is fair.

Prepare for division of debt in divorce

The same concept for preparing to divide assets in divorce applies in debt—make a list of all debts. This process means identifying all the debt with your spouse and then breaking them down into separate or joint obligations. If you disagree on where a particular debt falls, put it in a separate column, and consult a legal expert.

Notably, if the matter ends up in court, the judge may redistribute the breakdown you made as they review the facts. The judge may also request you and your spouse submit financial declarations that contain an accounting of your income, debt, and other assets.

Reach a divorce settlement agreements on debt

Fortunately, most divorces do not end up in court because spouses succeed in resolving their differences. In dire situations, couples hire lawyers or settle using an Alternative Dispute Resolution (ADR) method.

Filing for an uncontested divorce occurs after you’ve resolved all legal issues, including debt. This resolution means that you have agreed with your spouse who handles what debt, and you both promise to honor the repayment plan. Moreover, a prenup agreement that addresses debt is straightforward, and the couple abides by the terms.

To illustrate this, let’s take a look at an example of a divorce settlement on debt.

Example: John and Stacy were going through a divorce and had four pending debts in Arizona. One for a credit card debt they bought furniture with, an auto loan for a family car, Stacy's student loan, and John’s medical bill from a previous accident. An argument ensued because of the student loan. Stacy said she got promoted as a result of her studies, and John enjoyed the financial benefits. John said it was her responsibility because the student loan was in her name. A mediator told John even though he wasn't a co-signer, Arizona divorce laws split all debt 50/50 since Stacy accrued the student loan while married.


You can avoid debt-related stress after your divorce by liquidating assets to pay off joint debts. Afterward, you can agree to refinance the balance to the spouse responsible for a vital debt. Notably, this approach may only be possible with some debts.

You can also opt to settle any delinquent debt with your creditors as a couple, thus reducing the issues to address during the divorce process. A Debt Settlement Letter helps you achieve a settlement deal. This document requests a creditor to settle the debt for less than the original amount.

Follow up on your debt after divorce

While it is okay to feel relieved that you've settled everything after your divorce and have agreed on who is responsible for what debt, you may not be totally in the clear. For instance, if a judge gives your spouse the responsibility over a joint debt and they fall behind on payments, the creditor is not bound by your divorce agreement and may come after you to pay.

Luckily, you can go to court and file a lawsuit to seek relief against your ex. Unfortunately, your credit score may still be negatively impacted even if you return to court. Hence, if your name is on an account, but your ex is responsible for paying, regularly keep track to ensure the debt is up to date.

Have you received a lawsuit from an account your spouse is meant to be paying? SoloSuit can help you come up with powerful defenses using our Answer document. Ensure you respond to the lawsuit within your state’s deadline. Learn more in the following video:

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