Handling Debts In Divorce

Addressing your debts in divorce negotiations is an important part of working out your settlement agreement. 

By WomansDivorce.com | Answers by Brette Sember, J.D.

Making sure debts are divided properly can help prevent them from coming back to haunt you after your divorce is over. In general, debts that are acquired during the marriage are considered marital debt and subject to division in the divorce. How debts will be divided in a divorce partly begins with where you live. 

In the 41 equitable distribution states, debts will be divided equitably between the spouses. To reach an equitable division, a judge would take into consideration each spouse's income, assets, and ability to pay. Also, debts which are incurred in only one spouse's name generally remain that spouse's responsibility to repay.

In contrast, there are nine community property states in which all assets and debts will be divided 50/50 if it went before a judge. These community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In these states, creditors consider both spouses liable for debts acquired during the marriage, whether both spouse's names are on the debt or just one.

Another issue when dividing debts in divorce is taking into consideration when the debt originated. If the debt was acquired after the couple separated, some states would consider the debt the separate liability of the spouse who incurred them.

That said, it’s important to note that the divorce laws are unique for each state and vary in how debts are addressed in a divorce. This is why you need to research the laws in your state and consult with a divorce attorney in your area.

Even after you split the debts in your divorce, you may still be liable for debts that your ex takes on. The reason for this is that creditors aren't bound by the provisions of a divorce decree. If your ex defaults on a loan or mortgage that was in both your names, the creditor will go after you to collect payment, which can affect your credit. This is why debts awarded to each spouse need to be refinanced in their name only, if at all possible.

Below are some common questions about who is responsible for the debts, how they should be divided, and what can happen if your ex doesn't pay.

Dividing Debts in Divorce

Debt Responsibility

When Debts Aren't Paid After Divorce

How Bankruptcy Affects Debts in Divorce

Dividing Debts in Divorce

How is debt divided in a divorce?

Linda's Question: My husband has unpaid medical bills. Will I be responsible for half of that debt, or have half of it subtracted from my half of the assets in my divorce settlement?

Brette's Answer: If the debt occurred before the date of your physical separation, it will likely be considered a marital debt and be considered as part of the asset and debt distribution. The way that your assets and debts are split is determined according to your circumstances. In an equitable distribution state, the court looks at the entire financial picture and makes a decision based on each party's income and situation. In a community property state, assets and debts are split 50/50.

Should I close the joint credit cards after filing for divorce?

Maria's Question: We filed for divorce and our legal "cooling off period" ends next week. My husband keeps running up the credit card bills, arguing it is still his money and I will have to pay half of the debt. Would it be smart to close the joint account credit cards?

Brette's Answer: Yes, it is smart to close joint accounts. Generally, debt is divided as of the date of separation or filing. (Also see Protecting Your Credit during Divorce for more information)

How is debt split if each spouse has their own credit card?

Barb's Question: How are credit cards handled when each spouse has their own individual credit card account?

Brette's Answer: It doesn't make a difference whose name is on the card. Debt incurred during marriage is marital debt and must be divided. How it is divided depends on your state law. You should consult an attorney.

Is he required to assume the debt if he keeps the property?

Rayne's Question: We have 2 loans together; one was to cover a credit card that he maxed out and stopped paying for. He wants to keep everything that was purchased on that card. I don't have a problem with this, BUT I want him to be responsible for the loan payments. However, his credit is not good enough for him to refinance. What are my options? The other loan was supposed to be for house repairs and summer camp for our son; we split the money equally to accomplish this. Well, he blew his half of it and spent most of mine. I ended up only paying for summer camp with the money. I feel as though he should also assume the responsibility for this loan since he received the most benefit from it. Is it feasible to expect a judge to award me this relief?

Brette's Answer: Decisions about dividing financial obligations are made as part of the big picture of your property distribution, so it's difficult to say what a judge would or would not without knowing all of the details of your entire situation. Your incomes and spousal support orders are other considerations as well. You make a good argument for why your spouse should be responsible for these loans, so I would encourage you to discuss this with your attorney in detail so that he or she can present a complete argument to the court. If your spouse is ordered to be solely responsible for a particular debt, but cannot refinance, some of the assets he would otherwise be entitled to could be sold to pay for it.

Am I responsible for half of the debt if he makes more than me?

Tracie's Question: He brings in three times the income I do. Am I still responsible for half of all debt, even though he can pay it easier?

Brette's Answer: This depends on what state you live in, as well as what the other financial factors are that are involved. Schedule a consultation with an attorney who can sit down and review all of the finances involved and give you a comprehensive evaluation of how the case would likely be decided or settled

Is a student loan marital debt if it's incurred during the marriage?

Cynthia's Question: My husband & I have been married for 20 years. I am a full-time college student and have one year left until I finish my bachelor's degree. He says we should divorce so he won't get stuck with paying my college loans. Have you heard of anything like this before?

Brette's Answer: Your student loans are considered marital debt. If you divorce, it still is in the pot of debt that must be divided between the two of you. (Edit: The division of student loans during a divorce will depend on the individual circumstances of the couple involved. For more information on how this has been handled in past cases, please read the following article: Division of student loans in divorce cases)

Can I be compensated if he paid off the student loans after we separated?

R Asks: My husband went to private Pharmacy and Medical school and maximized his loans. I married him in his last year of medical school. Right after we separated he paid off all his student loans. Can I be compensated for that in our divorce?

Brette's Answer: If you contributed to paying off the loans, you are likely entitled to a portion of the value of his medical license. Talk to an attorney. You can find out more in our article on student loans and divorce.

Do I have to compensate him if I paid off pre-marital debt during our marriage?

Question: I owed the IRS a large sum ($50k) before I got married and I paid it off under an installment agreement during the marriage. Now my spouse is asking to be compensated for this debt I paid off, claiming I used marital property (my paycheck) to pay non-marital debt. And the marriage would have "benefitted" more if I did not have that debt prior to marriage. Do I have to compensate my spouse?

Brette's Answer: I would suggest you talk with your attorney. If both parties agreed to use the money in that way, it was consented to. 

Should we get an equity loan before we divorce?

Georgette Asks: We are getting a divorce due to marriage infidelity. We currently own a property together. He wants to get a $50,000 equity line of credit right away for a business venture. Will this hurt me in the long run?

Brette's Answer: You should make sure he holds off on that until your divorce is finalized, or at least until papers are filed. A loan on a joint property definitely impacts your divorce property settlement or judgment. Talk to an attorney as soon as you can.

Is the equity loan included if he assumes all bills and encumbrances?

Julie's Question: Under the agreement my husband wants me to sign; he is awarded our old house saying he receives the property, all mortgages, bills, and encumbrances. Does this include the Home equity Line of Credit taken out on that house or does it need to specifically written elsewhere?

Brette's Answer: It is a good idea to specify every single debt clearly so there can be no confusion.

What if the loan was from my father to pay down the mortgage?

Leanne's Question: My father has loaned me $50,000 to help reduce our monthly mortgage payments. If my husband and I divorce does this money become equity - meaning he is entitled to half? Or are we both responsible for paying it back to my father? Does your answer change should my father pass away prior to the divorce?

Brette's Answer: A loan is a marital debt. An inheritance is separate property, unless you have converted it to marital property by using it to pay marital bills.

Can I file an appeal requiring him to pay off the debt and refinance?

Maria's Question: In my divorce, my ex-spouse assumed responsibility for the credit card and house payment. The mortgage is still under both our names and the credit card is under my name. The decree states that he would continue to make payments when they were due. Can I appeal this in order to force him to pay off the credit card and refinance the home to remove my name from it?

Brette's Answer: No. But if he violates the order, you can enforce it.

Can I deduct the marital debt repayment on my taxes?

Inna's Question: If I was ordered by court to pay $30,000 to my ex in small installments within 4 years as a marital debt. Can I write it off on my taxes?

Brette: You need to consult with your attorney because it depends how the payments are labeled in your order or settlement.

Debt Liability in Divorce

Am I liable for anything if I walk away and leave it all to him?

Jody's Question: I plan on leaving my husband and the state due to various reasons. I don't want any of the assets we bought during our marriage and won't be seeking a divorce (he'll have to file for a default divorce if he wants one). He pressured me into signing an equity line of credit with him to build a summer residence, which unfortunately is in his name. Am I going to be liable for anything if I leave?

Brette's Answer: I highly recommend you not just walk away from the situation. If you default on the divorce the court can order you to be responsible for the marital debt. You will also likely lose your interest in the value of the summer home (it is marital property even if it is just in one name). See an attorney and do not just walk away.

Am I responsible for half the debt if my name isn't on it?

Tiffany Asks: My husband and I recently split up and I left him with everything. I am asking for a small amount for him to buy me out of the house because both our names are on it. He claims that I am responsible for paying half his debt even though my name is not on the line of credit. Can I be forced to pay something that my name is not on?

Brette's Answer: Debts acquired during marriage are marital debt and are divided in the divorce.

Am I liable if I didn't know about his debts?

Jenny's Question: If I didn't know about his credit card debt before I filed, am I responsible for that debt?

Brette's Answer: In the eyes of the creditors, you are technically responsible for debt incurred while you are still married. The court will divide your marital debt in a way that is fair and takes into account the situation.

Am I responsible for debts he owed before we were married?

Sherri's Question: Prior to our marriage, my husband purchased our home and even took out a second mortgage. The mortgages and deed are in his name only. Can I be held responsible for either of the mortgages or his credit card bills that he had prior to the marriage and even afterwards? I had no knowledge of his debt or even the extent of it until recently. Creditors are calling and he gets summons because of the delinquent bills!

Brette's Answer: If the mortgage was entered into before the marriage, it is a separate debt. Depending on which state you live in, any debt he has incurred during the marriage is marital debt unless you knew nothing about it and did not enjoy any of the benefits of it (using something he bought). You need to get a lawyer who can help you separate your assets and protect yourself from his creditors.

Is interest included if he is ordered to pay off the credit card?

Becky's Question: In my divorce, my ex was ordered to pay the balance remaining on a credit card at $200 a month until paid in full. He has to pay me since the card is in my name, and I send him a receipt to him showing that I paid the $200. His current wife says that they do not have to pay interest on the card because it stated an amount in the divorce that was owed on the card and that was all they were going to pay. Yes it did state an amount owed on the card in the divorce, but it also stated until paid in full. How should I approach this?

Brette's Answer: As long as there is a balance on the card, he has to pay. Even if he pays off the principal, there will be a balance on the card from interest. He's got to keep paying until it's paid off. I wouldn't even get into a discussion with him (or her) about this. Maybe send a copy of the pay stub on the card statement which shows the balance remaining. As long as there is a balance remaining, he has to pay it. If he won't, then you need to go back to court because he is violating your order.

Am I liable for his tax debt if we were only married for 3 days of the tax year?

Sheri's Question: I married on December 29 a little over a year ago. My husband is an independent contractor. He had not paid any taxes for the year, so we filed for an extension, but he still did not pay. We filed jointly for the year we got married, but I will be filing separately for last year. Are we both responsible for the first year if he stops paying payments (even though we were only married 3 days)? What can I do about it?

Brette Answers: You should discuss the matter with an attorney who can try to cut a deal with the IRS.

Can he make me pay for debts that happened after we separated?

Hedwig's Question: I am separated from my husband and awaiting divorce for 9 months now. Just recently my husband informed me that he's taken out multiple high interest loans and that when we sell our house, as part of the divorce, we will BOTH be required to pay off his loans with the monies made from the sale of the house. I did not co-sign on these loans. I had no knowledge of them. Am I really responsible for his debts he accrued?

Brette's Answer: Yes. Debts during marriage are marital debts. However, you need to talk with an attorney because debts and assets are normally divided as of their value (and existence) on the date of separation.

Will I be responsible for his nursing home debt if we divorce?

Victoria's Question: During our marriage my husband was an alcoholic. He ended up getting sick and now is in a nursing home with dementia and is unable to care for himself or make any decisions. I want to continue with the divorce - am I responsible for his debt? How can I begin this divorce when he can't speak for himself?

Brette's Answer: I would suggest you set up a consultation with a divorce attorney who is experienced in nursing home debt. This is a very complex area and you need someone with experience to advise you.

Am I responsible for his debts if the divorce was never finalized?

Jonnie's Question: I have been separated from husband for about 5 years, and now he is saying he is very ill. I served divorce papers, but couldn't afford to pay a lawyer so it was not filed. Am I still responsible for his debts?

Brette's Answer: If your divorce was never finalized, then you're still legally married. This in turn means that you're still jointly responsible for the debts as far as the creditors are concerned. You should consider seeing an attorney and getting the divorce finished, with a property division that would leave him responsible for his own bills from the date of separation.

How can I protect myself if he agrees to pay the loan in the divorce?

Christina's Question: We currently have a lien on our house which is a few years old because we can't afford to pay it. We are getting divorced and he wants to take the house and the responsibility for the lien. I am worried that after we divorce, if he does not pay it or file bankruptcy, will they come after me?

Brette's Answer: Yes, definitely. That's why you need to make sure there is an indemnification clause in the divorce decree. You need to talk with an attorney.

Does he have to repay me for the loan I paid off when the house sold?

Donna's Question: I inherited my house from my dad free and clear of any loans. My ex took out a loan against the house while we were married. The divorce decree says he is solely responsible for the loan and he has to pay directly for it until it's paid off. I have since sold the house. Will he be required to pay me for the portion of the loan that I had to pay off at the sale of the house?

Brette's Answer: Yes.

When Debts Aren't Paid After Divorce

Can creditors hold me responsible is he was awarded the debt?

Kandace: My divorce decree states my ex-husband is responsible for all debts acquired during our marriage (unfortunately, some were in my name). However, the creditors are taking me to court saying I owe half. Doesn't the divorce decree have precedence?

Brette's Answer: Unfortunately the divorce court has no jurisdiction over the lenders. Essentially you are still liable to them. This is why it is important to get debts transferred or refinanced into one name. The only option you have is to take him back to court for violating the divorce decree and to seek restitution.

Should I take him back to court if he didn't pay the debt?

Lucille's Question: Our divorce was finalized five years ago and the judge ordered that my ex was to refinance the mortgage. At the time, I signed the quitclaim deed to take my name off of the property. However, he has never tried to refinance it and it is on my credit reports as my debt. He also filed for bankruptcy and then the debt transferred over to my name completely. Do I still own this property? What are my legal rights for getting my name off of the loan and can I make him refinance?

Brette's Answer: You need to go back to court on a violation of the order. Since you signed a quit claim deed, you technically are not a legal owner anymore, even though the debt is in your name. You need the court to rectify this situation for you. You could ask for financial indemnification, or you could ask to have the property transferred back to you. Since he filed for bankruptcy, the debt isn't legally his anymore and he can't refinance it. You are going to need to go back to court to get this straightened out.

Can the car company get a judgment against me if he doesn't pay?

Judy's Question: My ex was ordered to pay for the car we got when we were married. The divorce judgment said he shall "keep the vehicle subject to any indebtedness, which he shall assume in its entirety and hold the plaintiff harmless, and shall sign any and all documents necessary to transfer said vehicle into his name". The car loan is in my name. Can the car company get a judgment against me because he refuses to pay?

Brette's Answer: An indemnity clause is binding only between the parties to the agreement and not the creditors. If the car loan is in your name and he doesn't pay, you're on the hook. Your recourse is to go back to court to get him to recompense you for the amount owed and any fees you had to pay. For more information regarding car loans, check out our article on divorce and auto loan responsibility.

How do I handle debt collectors who call at work?

Nilda's Question: I went through a divorce last year and some bills went unpaid. Now the legal department has been calling me at work. I told them that I have no money now and to stop calling me at work. The guy was really rude and told me that he won't stop calling me at work and he doesn't care if I lose my job or not. I just want to know if they have the right to do that.

Brette's Answer: Under the Fair Debt Collection Practices Act, they cannot call you at work to collect on a debt if you tell them not to. I suggest you Google this law and read all the protections it offers you. Good luck.

How do I keep his debt from being reported on my credit report?

Mary's Question: My ex had a loan on a travel trailer and my name is on the title, but not on the loan. Can they put it on my credit since he got it repossessed? He has been late several times and now has lost it. How can I get this off my credit?

Brette's Answer: Debts entered into during marriage are marital debt and both spouses are responsible. The only way to get it off your credit report is for the debt to be settled or paid in full.

Can I get his bad debt off my credit report?

Gwen's Question: The divorce settlement makes my ex responsible for a student loan. He is inconsistent in paying and it is hurting my credit. Do I send the divorce papers to the credit bureau?

Brette's Answer: There's no way to get it off your credit report, but you can submit a 100-word statement to the credit reporting agencies explaining this. On the legal side, the only solution is for you to go to court each time he is late and seek to be indemnified for the loss. This is why it is just not a good idea to agree to a situation where your ex is responsible for paying a debt that has your name on it. You could ask the court to order him to refinance it into a home equity or personal line of credit to get it out of your name.

Will the judgment allow me to get the money from his bank account?

Awbrey Asks: My ex-husband was ordered by the judge to pay off the car and transfer the title to my name once the car is paid off. He stopped paying on the car and it was repossessed. At our status hearing, I informed the judge of this and told him that my ex had not made his $300 a month payment in five months. The judge gave a judgment in my favor for the amount of $1500 to be paid on a date two months from then. Can I take the judgment to his bank and have the money removed from his account if he does not make payment by the deadline?

Brette's Answer: No you have to follow your state procedure for collecting on a judgment which means going back to court for enforcement.

How Bankruptcy Affects Debts in Divorce

What happens if we divorce after I declare bankruptcy?

Mona's Question: I filed for chapter 13 bankruptcy and my husband is tired of paying for everything so now he wants a divorce.  Can I sign the house over to him if I have a civil judgment against me?

Brette's Answer: You need to consult with your bankruptcy attorney as well as your divorce attorney to create a plan to move forward. 

Do I have to jointly file for bankruptcy?

Theresa's Question: My husband & I filed for a divorce. We are also going through financial troubles. He wants to file joint bankruptcy and I do not want to. Do I have to file a joint bankruptcy with him?

For more information on what to consider, read our article on Divorce and Bankruptcy.

Will I be responsible if he declares bankruptcy later?

Rachel's Question: We are planning to divorce and have agreed on which financial obligations we will each be responsible for. We will have a legal agreement on who pays what. To protect myself for the future, I want to know if he defaults on a payment or declares bankruptcy, will this affect me if we have clearly separated all of our financial matters.

Brette's Answer: It depends how exactly he takes over the debts. If your name is completely removed from everything, you're not liable. If, however, the court simply says he has responsibility for the debts and your name remains on the account, yes, the creditors could come after you. The best way for you to protect yourself is to make sure that debt is refinanced into single debt with his name only.

Will the court enforce the order regarding future bankruptcies?

Lynne's Question: It was ordered that joint marital indebtedness shall be equally shared by the parties if collection is pursued. It was also ordered that if either party files bankruptcy in an attempt to discharge a debt, then the other party shall be entitled to an immediate award of alimony in the amount for which the party would then be responsible to pay as a means of indemnification for said debt. My ex-husband filed bankruptcy and now the debtor is coming to collect the full amount from me. I just filed a motion to enforce the judgment. Am I handling this the right way?

Brette's Answer: It sounds like you're handling this the right way. The order is clear and the court will likely enforce it.

Are property settlements dischargeable in a bankruptcy?

Sheila's Question: My ex-husband agreed in our divorce to make payments on a credit card in my name that he used while we were married. He has not made a payment in 3 months. He has now declared bankruptcy. Is he in contempt?

Brette's Answer: Property settlements are not dischargeable in bankruptcy, so you can still seek redress from him for these payments.