Fair Division of Debt: What to Know If You’re Breaking Up

Divorce is messy emotionally and financially for most couples parting ways. One of the biggest concerns for many is who will be responsible for which debts. Who decides what’s fair?

Full Financial Disclosure

is the first step. In Missouri, each divorcing party is required by law to reveal all of their assets and liabilities to give a complete picture of their financial situation. This will include:

Debts incurred before marriage

After divorce, these remain the sole responsibility of the person who had that debt. Even if the other spouse voluntarily helped to make payments towards the other person’s student loans, credit cards, or other debts during the marriage, they have no legal obligation to do so after the divorce. 

Debts incurred during marriage

Property and debt from the marriage must be split equitably between the parties, no matter whether it’s in your name or your spouse’s name. Marital debt might include the mortgage or rent, utilities, vehicle loans, childcare and credit cards. Arguments can be made that if a debt benefitted only one person as opposed to the family, then it can be awarded to that party. 

Fair division of shared marital debts

To work out the division of debt in an equitable manner, consider:

  • The economic situation of each spouse when the division of property takes effect.
  • The custody arrangements of the children.
  • Each spouse’s contribution to marital property acquisition–including the contribution of a spouse who was the homemaker.
  • The conduct of both parties during the marriage.
  • If the debt primarily benefits one spouse or both. 
  • If one person will retain the asset. If so, titles and loan papers should be modified to remove the non-responsible party’s name; for a house or another appreciating asset, the person retaining it might also need to pay the other person their fair share of the equity.
  • If it’s unsecured credit card debt, what was it used for? Again, both names might be on the card, but if the credit card was used to benefit one spouse far more than the other, that’s a consideration.

If parties cannot agree together or through their lawyers, a family court judge may decide. 

If you are not married, you may have many of the same concerns, but courts are rarely involved. Huffington Post contributor Casey Bond addresses this issue in the article Who Is Responsible for Debt When You Get a Divorce or Break Up? For non-married couples, debts are 100 percent the responsibility of the person who took them. Shared debts must be worked out between the two parties, unless one person takes the other to claims court.

With a combined 30 years in family law, the attorneys at Jones Family Law Group, LLC, will provide the legal guidance you need. For questions or to schedule a confidential consultation, contact us today.