Debt in Divorce: What You Need to Know
Divorce isn’t just an emotional and legal process, it’s a financial one. While many people focus on dividing assets like homes, bank accounts, and retirement savings, debt can be just as impactful and often more confusing.
In this guide, we’ll walk you through the most common questions and concerns about debt in divorce: who’s responsible for what, how debt is divided, what happens if your spouse doesn’t pay their share, and how to protect your credit and future. This article is designed to inform and empower, not provide legal advice.
Why Debt Matters in Divorce
Debt can shape your financial future long after the divorce is finalized. Whether it’s a shared credit card, a car loan, or a mortgage, knowing how it will be divided and what protections you have is key to avoiding future conflict, credit damage, or surprise bills.
Is Debt Divided the Same Way as Assets?
Yes and no.
In divorce, both assets and debts are divided as part of the financial settlement. But how they’re split depends on your state:
Community property states (like California, Texas, Arizona): Most debts incurred during the marriage are considered jointly owned even if only one spouse signed for them.
Equitable distribution states (like Colorado, Florida, New York): Courts divide debts fairly, but not always equally. They consider factors like who incurred the debt, who benefited from it, and who is in a better financial position to pay.
Types of Debt Commonly Divided in Divorce
Here are the most common types of debt and how they’re typically handled:
1. Credit Card Debt
Credit cards can be complicated, especially if both names are on the account. Courts often look at:
- When the charges occurred (before or during the marriage)
- What the debt was used for (joint expenses vs. personal spending)
- Who is better able to pay
FAQ: What if my spouse racked up credit card debt without telling me? That may be considered “wasteful dissipation” of marital assets, especially if the spending was clearly unrelated to the marriage or for personal use without consent. In many states, courts have discretion to exclude this type of debt from being shared, but you’ll need strong documentation to prove the spending was excessive, hidden, or served no marital purpose.
2. Mortgage Debt
If you own a home together, the mortgage is typically considered marital debt. Whoever keeps the house usually assumes the mortgage, often by refinancing.
FAQ: Can my ex be forced to refinance the mortgage? Not by the court directly, but the divorce settlement can require it as part of the agreed financial arrangements. If your ex fails to refinance by the specified deadline, you may need to return to court to enforce the order or seek a financial penalty.
3. Auto Loans
Whoever keeps the car usually takes the loan. But if both names are on the loan and one spouse stops paying, the lender can pursue either of you.
4. Medical Debt
In some states, medical debt incurred during the marriage is considered joint debt even if only one person received care. Other states may assign responsibility to the individual who received care, especially if the debt was incurred solely in their name.
5. Student Loans
Student debt can be either marital or separate, depending on when the loan was taken out and how the funds were used.
FAQ: Do I owe part of my spouse’s student loans? If the loan was taken out during the marriage and benefited the household, a portion may be considered marital debt.
What If Only One Spouse Signed for the Debt?
Even if only one person’s name is on the debt, it may still be divided if it was incurred during the marriage. Courts look at the purpose of the debt and whether it benefited both spouses.
Example: If one spouse took out a credit card to pay for groceries, rent, or family expenses, it may be shared. But if they used it for gambling or a secret vacation, that’s different.
What If My Ex Doesn’t Pay Their Share?
This is one of the most common and frustrating post-divorce scenarios. Even if your divorce agreement says your ex must pay a debt, creditors don’t care. If your name is on the loan or account, the creditor can still come after you.
How to Protect Yourself at Every Stage:
Whether you are just starting the divorce process, were recently served papers, are in active negotiations, or are finalizing your divorce terms, there are key ways to protect yourself from debt-related surprises.
If you’re just starting the divorce process:
- Begin gathering loan or debt statements and identifying which are in joint vs. individual names.
- Request a copy of your credit report to ensure you understand your full debt profile.
- Avoid taking on new joint debt or co-signing loans during this time.
If you’re in the middle of negotiations:
- Work with an attorney or mediator to clarify who will be responsible for each debt.
- In some cases, people consider an ‘indemnity clause’ in their settlement. This clause means that if your ex doesn’t pay a debt assigned to them, they agree to cover any costs you face because of it. While it may help you recover money, it won’t stop creditors from contacting you if your name is still on the loan. Because every case is unique, it’s a good idea to talk with a lawyer about whether this option could help in your situation. Remember that the most secure approach is still to refinance or pay off joint debts when possible.
- Ask your attorney or mediator for repayment timelines, refinancing requirements, to freeze or close joint credit accounts to be included in your agreement.
After the divorce is finalized:
- Follow through on debt transfers or refinancing as outlined in your settlement.
- Monitor your credit regularly to ensure your ex is meeting their obligations.
- Contact creditors to remove your name from joint accounts, where applicable.
Many financial actions, like refinancing or fully separating accounts, can’t happen until your divorce settlement is final. But early planning helps lay the groundwork for smoother negotiations and better enforcement later. For example, if you know you’re likely to keep a home or joint loan, planning now for future refinancing or account closure makes it easier to take action once the court order is in place. Being proactive during the early stages builds clarity, avoids surprises, and supports a more seamless financial transition.
Final Thoughts
Debt doesn’t disappear in divorce—it gets paid off or reassigned. The more you understand about how debt is handled in your state, the better prepared you’ll be to protect yourself and avoid future problems.
Clear documentation, fair negotiation, and the right tools can help you navigate divorce debt with more confidence and less chaos. If you’re unsure about how to handle a specific debt, talk to a divorce attorney or financial advisor who understands the laws in your state.