Dividing Debt in a Divorce

Jenkintown Debt Division Divorce Attorney

The division of marital debt is, in many ways, as important as the division of marital assets. While most people facing divorce are quick to ask their divorce lawyer how their 401k, IRA accounts, savings, and real and personal property will likely be divided, too often scant attention is paid to the division of marital debt. Here, it’s important to remember you’re contractually responsible for any credit card, loan, or line of credit your name is on, regardless of whether or not you use a particular account. Consequently, if you co-signed on your spouse’s car loan or have a joint credit card with him or her, you’re responsible for any outstanding debt on it.

Marital Debt and Your Divorce Agreement

Confusion arises when people mistakenly think their divorce agreement takes precedence over or nullifies their financial obligations in regard to joint credit cards, unsecured loans, medical bills, or joint lines of credit. What cannot be emphasized enough is the fact that your divorce agreement has nothing to do with your financial obligations in regard to lines of credit your name is on. When you take out a joint credit card, loan, or line of credit you are contractually bound to adhere to the terms of the line of credit in question.

Consequently, even if your spouse had exclusive use of a credit card or loan, if your name is on the account you can be held financially responsible for it should he or she fail to pay off it off. Thus, even if your divorce agreement indicates your spouse is responsible for it, creditors can still (and will!) initiate collection actions against you if your ex-spouse fails to pay off the debt. Telling a creditor or collection agency that your spouse is responsible for the account under the terms of your divorce agreement will not relieve you of your contractual obligations if your ex-spouse fails to discharge the debt.

Dividing Marital Debt – How to Protect Yourself

What steps can you take, then, to protect yourself? If possible, the best way to discharge marital debt is accounting for it in the division of marital assets. For example, suppose you and your spouse owe $5,000 on a joint credit card. When assets or savings are divided, include in your divorce agreement provisions that indicate which spouse will pay the credit card off and apportion $5,000 to him or her for that explicit purpose. If he or she fails to discharge the debt, you can then initiate a contempt of court order against them in order to collect any money you end up paying as a result. While it may take some time, the court has the power to garnish wages and use other means to ensure you are compensated accordingly.

Don’t Ruin Your Credit – Divide Your Marital Debt and Protect Yourself

Failure to properly divide or discharge marital debt can harm your credit report should accounts go delinquent. That’s why it’s important to take steps to protect yourself in your divorce agreement. To learn how we can help you, contact Jenkintown marital debt division attorneys at Joanne E. Kleiner & Associates today.

Speak Your Mind


Montgomery County Bar Association
Pennsylvania Bar Association
International Academy of Collaborative Professionals