Am I Responsible for My Spouse’s Debt in a Divorce?

Debt and divorce go hand-in-hand like peaches and cream, only it’s definitely not so sweet all the time. If you’ve been married for any length of time, it’s almost certain that you and your spouse have some marital debts. How these debts are handled during your divorce can make a big impact on your credit long after the two of you split. Once you say “I do” you are not only blending your life with your partner you are also commingling your finances, your property, and your debt plus the marriage debt such as mortgages, credit cards, car loans, and maybe even student loans. What happens to those debts when you and your spouse split up??

Assigning Debts in Property Division

Equitable distribution is a method of dividing property at the time of divorce. All states except for a handful follow the principles of equitable distribution. Equitable distribution does not mean “equal”; it means that assets acquired during a marriage are subject to distribution. Each spouse is responsible for the debts they incurred before and during the marriage. Even if it was acquired during the marriage the spouse will usually be given the debt they acquired during the marriage. If you and your spouse cannot decide who will be responsible for paying certain debts the judge can divide the debt on your behalf. In Kentucky, divorcing spouses are less likely to incur their spouse’s debt than in states that do not have equitable distribution. However, there is always a but you could still be saddled with your spouse’s debt.

Taking on Your Ex’s Debt

When two people apply for credit together, each is responsible for repaying the debt. This is true even if your divorce decree assigns the debt to your spouse. If an account goes into default due to non-payment, both spouses will be held liable since creditors are not bound by a divorce decree. On top of that, your credit score will drop, which will make getting credit in the future harder.

Protect Yourself From Your Spouse’s Debt

Consider closing joint accounts that were opened in both of your names, as well as removing your spouse as an authorized user on your own accounts. You can also ask the creditor to convert these accounts to individual accounts. Since creditors aren’t obligated to convert such accounts, you may need to apply for credit on an individual basis. The creditor will then extend or deny you credit based on your new application. Refinance the debt to ensure it is solely your spouse’s legal responsibility. If you had a prenuptial or postnuptial agreement that would help.

Equitable distribution works from an assumption that the marriage is an economic unit and that what the spouse acquired during the marriage is subject to distribution — regardless of need.

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About Grubbs & Landry

At Grubbs & Landry, PLLC, we are dedicated to personal and friendly service. We manage our practice in an ethical, cost-effective manner to best help our clients resolve their legal issues with the least expense possible. We pride ourselves in advocating for our client in divorce, child custody, and child support matters as well as other family law matters. We are active in prosecuting personal injury cases-recovering for the injuries our clients sustain due to the negligence of others. Additionally, we help our clients prepare for the future through the preparation of Wills, Power of Attorney and Living Will.
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