Divorce can bring about many complex financial questions. One of the most common concerns is whether you are responsible for your spouse’s debts after a divorce. In general, the responsibility for debt depends on several factors, including the type of property laws in your state and how you incurred the debts.
Marital debt and property division
In many states, the court divides property and debts acquired during the marriage between the spouses during divorce. This includes any debts accumulated jointly or individually during the marriage. For example, if you and your husband opened a joint credit card or took out a loan for a car or home, both of you are typically responsible for paying off that debt. In community property states, like Wisconsin, both spouses divide all debts equally.
A court may still assign both parties responsibility if they incurred the debt during the marriage, even if only one spouse’s name is on the debt. The court includes mortgages, car loans, and even student loans that the family used.
Types of debt in divorce
Courts divide debts into two categories: joint and individual. Joint debts, such as credit cards or home loans, remain a shared responsibility. Both spouses will be liable for the debt, even if only one spouse uses the credit. Individual debts, on the other hand, stay with the person who incurred them.
The court will decide who is responsible for which debts based on the state laws and the specifics of the case. If you are worried about how your divorce will address debt, you can talk to an attorney.
How to protect yourself from debt liability
To protect your finances, make sure you address joint accounts before or during the divorce process. It may be helpful to close joint accounts, remove your name from any shared loans, or refinance mortgages to remove one spouse’s name. Additionally, a divorce settlement can include an indemnity clause that holds one spouse responsible for certain debts if they fail to pay.
Understanding how the court will divide debt can help you plan and avoid surprises later, making the divorce process less difficult and stressful. Consult a divorce lawyer to protect yourself and clarify any uncertainties about debt responsibility.