Three Ways Of Looking At Marital Debt

20 September 2021
 Categories: Law, Blog


As thoughts of divorce emerge, many couples wonder what will happen to the debts they owe. Debts may be handled in several ways, but states view marital debts in two main ways. Read on and find out what you can do to simplify matters and learn more about the three main ways of dealing with marital debt.

Keeping It Fair and Simple

You don't have to make things complex when it comes to marital debts. Some couples divide up the debts in what they feel is a fair manner and let their lawyers turn the plan into part of the divorce settlement agreement. It's usually better to pay off any joint debts if possible and then some couples decide to take responsibility for their personal credit card and auto loan debts. Whether you do it this way, ask your lawyer for help, or get the judge to decide, it's helpful to know what is meant by marital debts.

What Marital Debts Include

If you made a list of all of your financial obligations, you might begin to see a pattern. Some recurring debts will be due as long as the home remains in one of your names. Many times, the mortgage is a joint marital debt. Most people have their own credit cards. Unless the debt was taken on prior to the date of marriage, it's probably a marital debt. However, some people take out mortgages jointly before they are married. This situation deals with a secured debt meaning the obligation is attached to the asset itself. Since this debt, auto loans, and other secured debts are attached to what might be marital property, the responsibility for paying it depends on the outcome of the property settlement agreement.

Equitable Distribution: Looking at the Whole Picture

Many states use equitable distribution than the other way of viewing marital debt which is the community property model. Equitable distribution is an attempt to look at the overall manner of dividing both debts and property. For example, if one party ends up being responsible for a certain debt, then they may be the beneficiary of more marital property than the other party. It's part of the give-and-take that occurs with divorce in these states. This way of doing things also focuses on who took out the debt and who benefited from it.

Community Property: Taking the Middle Road

California is well-known for being a community property state. The word community in this case means the two parties. The couple is the community, and they are seen to be equally responsible for all debts the couple has incurred since the date of the marriage. That means that one party is 50% responsible for their spouse's credit card debts even if they had no idea the card existed.

Find out more about marital debts, speak to your divorce lawyer.