Frequently Asked Questions (“FAQ”)
on Debt and Divorce
Q: How is the Debt You Incurred During the Marriage Divided?
A: Aside from the property acquired during the marriage, the debt incurred during the marriage is divided upon divorce. Dividing the debt upon divorce determines who is responsible to repay the debt.
If both spouses co-signed for a debt, both spouses are held to “joint and several liability” for the debt. “Joint and several liability” means that each spouse is responsible for the entire debt, but also that both spouses are jointly responsible for the debt. When we divide joint and several liability, such as in a divorce, the debt becomes the responsibility of both spouses. Often, however, one spouse becomes responsible for the entire amount of the debt. This is generally offset by an “equalization” payment, where the spouse who pays the debt receives more property in the settlement than the spouse who is free from the debt.
In some states, debts that benefit the family become joint and several liabilities for both spouses. For example, housing, furniture, furnishings for the home, childcare, and children’s doctor expenses are purchases and debts incurred for the benefit and wellbeing of the family. Since both spouses benefited from these family expenses, both spouses would be responsible for the repayment of these debts.
Expenses incurred solely for the benefit of one spouse, such as a vacation or hobby, may remain the responsibility of the spouse who obtained the benefit. However, in most community property states, both spouses are responsible for the repayment of debt incurred during the marriage, even if only one spouse enjoyed the benefit.
The debts that one spouse brings into the marriage remain the responsibility of that spouse. In special circumstances, both spouses are responsible for separate debt. When a couple files a joint tax return, the Internal Revenue Service holds both spouses to joint and several liabilities for the tax.