March 23, 2023

Divorce can already be messy, and when you find that your spouse has run up credit card debt, that can make things even more complicated. In many cases, financial infidelity is what precipitated the divorce, and the betrayed spouse may be concerned that they will be on the hook for debt they did not create. What does the law say about debt in divorce?

How Debt is Divided in a Divorce

Marital debt is typically divided just as marital assets are divided. Both spouses will submit a financial affidavit detailing their full financial picture, including income, accounts, property, assets, and debts. Any debt that belongs to both spouses, such as the mortgage on a house, a car loan, medical expenses, home equity, or any other loans, will be split. In some cases, assets will be liquidated to pay off the debt, with the spouses splitting any proceeds. In other cases, one spouse may “buy out” the other. In still other cases, both spouses will agree on their shared responsibility and the loan may be refinanced to reflect the current situation. The debt may or may not be split equally in common law states, such as Ohio, but rather, split according to the full financial picture of each spouse, with the higher earning spouse becoming responsible for more of the joint debt.

When Can I Be Held Responsible for Credit Card Debt?

If your name is on a credit card or other debt, even only as a co-signer and not as a joint account, you can, and likely will be liable for the debt. All joint accounts are considered the responsibility of both spouses, even if one spouse was responsible for the debt. Moreso, if the debt was incurred by your spouse during the marriage, regardless of who’s name was on it, can be considered community debt in a state with community property. Ohio is a common law state, meaning that the debt generally belongs to the spouse whose name is on the debt, but if you have moved from a community property state and the debt was incurred in that state, again, things can get complicated. Giving your divorce attorney a full rundown of your finances and a timeline of when debts were incurred can help with determining how the debt is shared.

How Can My Spouse’s Debt Impact Me?

First, debt incurred prior to the marriage or after filing for divorce will not be considered community debt. But if the debt was incurred during the marriage, things can get murky. If your name isn’t on the account, you may not be personally liable for the debt. However, any assets that you hold jointly may still be subject to use to pay off the debt. This may mean that even though you, specifically, won’t be responsible, your marital assets may be significantly diminished before they will be divided, and this can have a serious impact finacially. However, during the divorce, spouses can mutually agree on the obligation of the debt. If one spouse accepts responsibility, the debt will not be held against the other. Likewise, the parties can agree that even though the debt is held in one name only, both spouses agree to split the debt. Your attorney can advise you on how to proceed and best protect yourself.

As with most divorce concerns, the best person to talk to about how to handle your spouse’s credit card debt when filing for divorce is your attorney. If you’re filing for or have recently been served with a divorce and you have questions about the legal process, contact my office right away.