Will I Have to Take on My Spouse’s Debt During a Divorce?

Debt in high-asset divorces plays a different role than it does in standard divorces. Debt is often used as a leverage tool by high-asset couples, rather than a survival tool. However, this fact can also make it much more difficult to divide debt during a split.

If you are concerned about how yours and your ex-partner’s debt could affect your divorce, we are here to help. Call Kirk Drennan Law at 205-803-3500 to schedule a consultation.

Debt and Asset Division

In Alabama, debt and assets are divided in an equitable fashion. That means that, rather than being divided 50/50, debt is split up in a way that is fair to both parties. Factors that affect the division of debt include:

• Who accumulated the debt
• The circumstances of the divorce
• Each party’s income and assets
• Each party’s earning ability
• The tax burden of each individual

Because debt is divided equitably, there is a lot of leeway in how you and your ex-partner navigate this part of your divorce.

Debt That is Divided in Alabama

Any debt that is not considered separate is divided in Alabama. For example, if one individual comes into the marriage with $40,000 of student debt, that will likely not be divided. It stays with the individual who brought it into the marriage. Other debt that would be divided includes:

• Credit cards. This includes credit cards in one individual’s name. If the credit card was used for both parties or for the benefit of the marriage, the accumulated debt will likely be divided.
• Tax debt. If you and your ex-partner have outstanding taxes, you may both be held responsible for the amount due.
• Student loans acquired during marriage. If one or both individuals accumulated student debt during the marriage, it may be split up.
• Medical debt. Medical bills are often the responsibility of both parties.
• Personal loans. Personal loans to buy small-ticket items or pay off other debts are often considered the responsibility of both partners.
• Real estate. Many high-asset couples have real estate debt beyond the mortgage on their primary home. If you have rental properties or vacation homes, the debt stays with the person who keeps the property after the divorce.

Debt You Didn’t Know About

Another factor to consider is the role of debt you did not know about. Unfortunately, this is relatively common as a marriage breaks down. One partner racks up a list of gambling debts, goes on a shopping spree with previously unused credit cards, or takes out a line of credit on the home. Unfortunately, even if you did not know about the debt your partner accumulated, you may still be responsible for part of it in the divorce.

This is a gray area in divorce, and it’s something to discuss in-depth with your attorney. Morally, you should not have to spend your post-divorce years paying for your ex-partner’s private debts. Legally, though, you may have to compromise to wash your hands clean of their debts.

How Debt Collection Can Become Complicated

Another factor to think about as you prepare for negotiations is how creditors look at divorce decrees. While some creditors will follow the terms of the divorce decree and only pursue the named partner for the debt, others will go after both parties.

This generally isn’t an issue as long as both parties stick to the payment terms of the debt and don’t default. However, if one partner is prone to forgetting payments or is spiteful enough to miss payments to hurt the other person, the effects of the divorce can drag on.

The same is true if one party is dependent on their credit score after the divorce. While the other party might be responsible for the debt, it’s likely that the debt will remain on their credit report and make it difficult for them to take out new lines of credit.

Protecting Yourself During the Divorce Process

There is no one-size-fits-all approach to getting what you want from the division of debt. You will not automatically be held responsible for your ex-partner’s debts, but you also won’t automatically walk away unscathed. If you want to walk away with less debt, you may have to compromise and give up other assets in exchange.

Find Out How Kirk Drennan Law Can Help You

Negotiating the terms of a divorce is a complex process, and you deserve skilled legal representation. At Kirk Drennan Law, we handle complex divorce cases and advocate for our clients every step of the way. Set up a time to talk, and we’ll discuss a plan for your divorce. To get started, call us at 205-803-3500 or get in touch with us online.