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Ensuring a fair distribution of marital debt after divorce

by | Apr 3, 2018 | Divorce, Firm News |

On average, 40 to 50 percent of marriages will end prematurely, and some will end in a financial mess. When couples call it quits, what happens to the debt incurred during the marriage and who determines how it is distributed after a divorce? This may be determined by where one lives. California is one of nine community property states that recognizes that all debts are the responsibility of both parties.

All other states are known as equitable distribution states or common law states. Both parties are held accountable only if they are joint owners of the account. For joint credit card accounts, both spouses are responsible, but they may appeal to the account issuer to request that the debt is split. Mortgage debt is handled similarly; one spouse may refinance the home in his or her name only or initiate a buyout. Regardless of whether one is in a community state like California or an equitable distribution state, assets are divided along with debts during a divorce.

Couples who waive equitable distribution remain responsible for their debt. However, joint debt remains the obligation of both parties. If one spouse reneges on the agreement, he or she may be held in contempt of court for not fulfilling the court order. Another option may be to close off joint accounts and refinance debts to an individual account.

It is essential for both parties to have a clear understanding of who gets what after a divorce. To ensure the fair distribution of marital debt, experts recommend a written separation agreement assigning responsibility for each debt accrued. In most divorce situations, the goal is for both spouses to end their marriage with similar asset value and an equal share of the marital debt.

Source:, “What Happens to Debt After Divorce?“, Holly Johnson, March 30, 2018


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