Divorce and Debt Responsibility: Unsecured Debt Explained

Updated by Tracy Achen, Divorce Coach
Answer by Timothy McNamara, Divorce Financial Analyst

It's important to know how unsecured debt responsibility can impact your financial future when negotiating and drafting your divorce agreement. You'll need to consider whose names are on the debts, when they were taken out, and who will be responsible for their repayment after your divorce. 

What Qualifies as Unsecured Debt in Divorce?

Unsecured debt is any debt that isn’t tied to a physical asset (like a house or car). Common examples include:

• Credit cards (joint or individual) 
• Personal loans 
• Medical bills 
• Store credit accounts 
• Some student loans

Because there isn’t any collateral attached to these types of debt, lenders rely entirely on the borrower(s) to repay what is owed.

Who Is Legally Responsible for Unsecured Debt?

This is where things get tricky and where a lot of people make costly assumptions. 

Generally, you are responsible for a debt if:

• Your name is on the account 
• You co-signed the loan 
• It’s a joint credit card or store account 
• You live in a community property state (AZ, CA, ID, LA, NV, NM, TX, WA, and WI) and the debt was incurred during your marriage

You may NOT be responsible if:

• The debt was incurred by your spouse before the marriage
• The debt is solely in your spouse’s name (except in community property states) 
• You’re only an authorized user on the account (unless you live one of the community property states listed above)
  

In other words, creditors aren’t bound by your divorce decree. The lender can still come after you for payment if your name is on the account or you live in a community property state, even if you divorce decree says your ex is responsible for the debt.

How to Protect Yourself During Divorce

There are some steps you can take to protect your finances when you’re doing through a divorce. Start with these:

• Pull your full credit report early to verify all debts that are reported in your name.
  
  
• Close or freeze all joint credit accounts to prevent any debt from being added to the account.
  
  
• Pay off debt balances and remove your name from shared debt if feasible. 
  
  
• Refinance the debt balances into individual accounts whenever possible. 
  
  
• Keep detailed records of all debts so you can reference these in your divorce.

Taking control early can prevent long-term financial stress.

Real-Life Scenarios

Scenario 1: Joint Credit Card
Sarah and her ex agreed he would pay off their joint credit card. He didn't - and the creditor came after Sarah because her name was still on the account.
Lesson: If your name is on the debt, your credit is at risk.

Scenario 2: Debt in One Spouse’s Name
Jessica's husband had a personal loan in his name only. While she wasn't legally responsible to the lender, the court still factored the debt into the divorce settlement.
Lesson: Debt can still affect your financial outcome - even if it’s not "yours."

Unsecured Debt Responsibility FAQ

Understanding your options regarding unsecured debt responsibility can help you avoid costly mistakes that could impact your financial future. This discussion from the financial analyst highlights what needs to be considered. 

Rayne's Question: I'm going through a divorce. We have two loans together; one which was used to pay off a credit card he maxed out and then stopped making payments on. 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 it in his name alone. What are my options?

Timothy's Answer: When couples have debt of any kind, particularly when the debt is jointly held (in both of your names), it becomes very important you and your soon to be ex-husband have a clear agreement as to who will be responsible for repaying the debt.

I would define a clear agreement as being a written agreement. If you're using an attorney, he or she will put language in your separation agreement or divorce decree detailing this. This agreement should include the account numbers, payment terms, and instructions concerning what will happen if payments aren't made according the agreement.

If you and your husband took out loans(s) to pay off high interest credit card debt and the items purchased were for his personal use or benefit, then he should be responsible enough to pay his debt. The fact you are getting a divorce doesn't relinquish his obligation to pay this, but the fact that the loan is also in your name doesn't relinquish your obligation either.

While you did not mention the type of loans the two of you have, generally speaking you cannot remove one party from a debt obligation unless the debt is re-structured in some way, such as with a home equity loan.

The fact your husband has a sub-par credit rating should be reason enough for him to want to begin reestablishing and improving his credit. The first way to do this is to make every payment on time. You both have a mutual stake in making sure that your good credit is maintained and it would not be in the best interest of either of you do anything to damage it. If one of you doesn't meet your debt obligations, you will both suffer equally and the effects can last a lifetime.

If you feel your husband cannot or will not be a responsible adult and pay his debt obligations, I would suggest you seek outside help to draft an agreement outlining each other's responsibilities.

If you are not currently working with a lawyer, another option is to consider using mediation. During mediation, both spouses voluntarily meet to discuss the various issues which brought you there. If both of you can reach an agreement, the mediators can help you put that agreement into writing.

Any agreement reached carries the same weight as if ordered by the court. One of the main benefits of mediation is that any agreement which is reached is your own and not dictated to you by someone else. People tend to honor agreements they make themselves. - Timothy

Final Thoughts: Protect Yourself First

Getting divorced has a way of impacting your financial stability, especially if you find yourself liable for debts that were assigned to your ex in the divorce. Understanding how unsecured debt responsibility works in divorce can help you make smart decisions, ask the right questions, and avoid costly mistakes. 

Copyright WomansDivorce. All rights reserved | Updated May 1, 2026

Related:

• Factors Determining Spousal Debt Liability 
• Dividing Credit Card Debt in Divorce  
• FAQs on Dividing Debts in Divorce 
• More Answers from Timothy