When You Have Debt in a Marriage, are Both Spouses Responsible?

Upon divorce, under Georgia law, a judge must equitably divide the marital estate. That is not always the same thing as equally.

Mortgage debt, credit card debt, and student loans constitute almost all the $17 trillion in household debt. During the marriage, the spouse listed as the debtor is technically responsible for debt repayment. Most spouses disperse these funds from a joint checking account. So, during the marriage, individual responsibility means little. However, upon divorce, individual responsibility for a debt means a lot.

Georgia is an equitable division marital property state. The judge usually divides the marital estate, which includes assets and debts, according to the factors discussed below. Therefore, both spouses have important legal and financial rights. A Norcross family law attorney speaks up for you in court and at the negotiating table to ensure these rights are protected, and the property settlement equitably divides the marital estate.

Classifying Debts

Only marital property, as opposed to nonmarital property, is subject to equitable division. The spouse that incurred a nonmarital debt is exclusively responsible for it, at least in most cases. The general classification rule seems simple enough. Debts incurred before the marriage or by gift (which in this case is an unwanted gift) are nonmarital debts. Everything else is a marital debt.

However, as the old saying goes, the devil is in the details. Over time, debts in a marriage become commingled. In this case, commingling creates additional debt.

Assume Fred co-signed a car loan for his son, who defaulted on the payments. Fred paid the remaining balance of the note, $20,000, from a joint checking account he had with Wilma.

Fred’s assumption of his son’s debt was a nonmarital obligation. Nevertheless, if Fred and Wilma divorce, she might be entitled to an equitable share of those payments, which is probably $10,000, under the dissipation (waste) of marital assets rule.

The disposition of the collateral is also complex. Under these facts, the car might belong to Fred, his son, or Wilma, depending on the specifics.

Dividing Debts

Classifying debt is just the beginning. In the next phase, a judge must equitably divide debt between the two spouses.

In Georgia, equitable division basically means the divorce cannot impose an unfair financial burden on either spouse. To give this broad principle specific meaning, the court usually considers a number of factors, such as:

• Future earning capacity of each spouse, given such factors as age, health, and educational background,
• Length of the marriage and the standard of living during the marriage,
• Awards of child support, spousal support, and nonmarital debts or property,
• Custody of minor children, and
• Dissipation of marital assets.

A premarital agreement could come into play as well. If Fred and Wilma designated his and her debts in such a contract, the judge will probably enforce it unless its terms are grossly one-sided (e.g., I get all the assets, and you get all the debts).

Equitable division naturally favors women, Divorced women have much higher poverty rates than divorced men. However, to convince a court to make a disproportionate division, a Norcross family law attorney must normally present substantial evidence proving at least one of the aforementioned factors.

Reach Out to a Gwinnett County Family Law Attorney

Dividing marital debts could be the most complex portion of a divorce. For a confidential consultation with an experienced family law attorney in Norcross, contact Zimmerman & Associates, Attorneys at Law.