How Is Debt Divided Upon Divorce?

You’re going through a divorce. You may find yourself asking: how is debt divided in divorce? The way that existing debt is divided in the event that a married couple divorces varies from state to state as well as with individual situations. In most cases, the couple will negotiate an agreement dividing the debt that is amenable to both parties. If the divorce goes to court, the judge will be responsible for dividing the debt among the two parties involved. Read on to learn more about common scenarios in which debt may be divided when a couple divorces.

How Is Debt Divided in Divorce?

If the debt in question was cosigned by both parties, then the couple shared what is known as “joint and several liability” for the money owed. This means that the former spouses remain equally responsible for the debt. However, in the divorce settlement, one party will be assigned to pay off the specific debt, often receiving compensation in the form of additional marital assets. This is also true for debts that are incurred in states considered “community property” states. Tax debt is considered by the IRS to be the responsibility of both parties regardless of what state they live in, unless the couple filed returns separately.

In states that are not community property states, both spouses remain responsible for debts that were incurred to the benefit of the entire family; for example, this may include mortgage for the family home, furniture and furnishings, child care, and medical expenses. However, debts incurred for the benefit of one spouse alone–for example, solo travel, a hobby, or other pursuits–would remain solely the responsibility of the spouse who incurred that debt.

In the case of debt that a spouse had incurred before the marriage took place, he or she would remain solely responsible for that debt.

If you are divorced and your spouse is not paying debt he or she was assigned by the court and for which you are jointly responsible, you can request that the court enforces the divorce agreement and instills penalties for failure to pay as agreed.

How is debt divided in divorce in California? These scenarios vary depending on your specific divorce settlement, so consult a licensed attorney if you have additional questions about your own situation. Call Orange County Divorce Attorney Ann Thomson (Seal Beach family law attorney) at 562-431-4333 or email her today.

From offices in Seal Beach, the Law Office of Ann A. Thomson serves clients throughout Southern California in communities such as Seal Beach, Santa Ana, Brea, Yorba Linda, Fullerton, Corona Del Mar, Costa Mesa, Newport Beach, Irvine, Laguna Beach, Dana Point, Mission Viejo, San Clemente, San Juan Capistrano, Anaheim, Fountain Valley, Garden Grove, Long Beach, Huntington Beach, Norwalk, Torrance, Rancho Palos Verdes and Los Angeles.
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