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How Responsible are You for Your Spouse’s Debts?

Debt is one of those topics people rarely want to discuss, but with home mortgages and student loans, most people have at least some amount of debt they are responsible for paying back. This does not take into account the credit card, car loans, and medical debt that many people also carry. When a married couple gets divorced, a reasonable question that may follow is what happens to this debt. Who is responsible for paying what, and how does one determine a fair division of these liabilities in the divorce settlement?

No one wants to be responsible for someone else’s debt, but debt is lumped with assets as part of the general division of property in divorce. Thus, the question becomes whether there is a distinction between different types of debt, and are there debts a spouse will always be responsible for paying regardless of how it was acquired? A person’s finances shift considerably after divorce, and recovering from the lost income is tied in part to the amount of debt a person must take with him/her when exiting the marriage. Consequently, this issue is a major sticking point for many couples. A discussion of how the law views the division of debt, and specific types of debt a spouse will always be on the hook to pay, will follow below.

When and How Was the Debt Acquired?

It is not uncommon for couples to enter into marriage with some amount of debt, which may still exist at the time of divorce. Generally, all property owned by either spouse, regardless of when it was acquired, is considered marital debt under Indiana law. The normal expectation is that this property, assets and debts, should be divided equally. However, this presumption can be rebutted, and evidence presented that an equal division would not be reasonable or fair. For instance, debt that was acquired before the marriage or was taken out in one spouse’s name, could be justification for leaving that liability with him/her.

By contrast, debts acquired jointly are typically divided equally, unless the spouses agree differently, or a judge can be convinced that one spouse should bear a greater share. Note that cosigners on credit cards, even if the account is not in the names of both spouses, are treated this way, and the default will be to divide it equally. A different outcome is highly dependent on the facts of each case and should be discussed with a divorce attorney to understand all the options.

Debt Spouses are Expected to Pay

It is easy to understand why joint debts would be divided evenly, but some debts, even if only in the name of one spouse, can still be the other spouse’s legal responsibility. Debts related to necessities, such as food, medical care, housing, etc. are considered the responsibility of both spouses, even if one has the ability to pay and the other does not. Creditors will first seek reimbursement from the spouse who received the goods or services, but if unsuccessful, they have a legal right to ask for payment from the other spouse. To ensure that this debt does not follow a spouse post-divorce, it is important to include provisions in any divorce settlement that disclaim medical bills or other similar debt from the liabilities a spouse assumes. Such an agreement will make it harder for creditors to go after a former spouse.

Call an Indiana Divorce Attorney

Who will take responsibility for debt is never easily decided, but it is a necessary part of any divorce case. This issue can cause a lot of tension and misunderstanding between spouses and is best discussed with a divorce attorney to learn how to approach this matter. Christopher L. Arrington, P.C. understands the nuances of divorce, and is ready to help you achieve an outcome that is fair and appropriate. Contact the Brownsburg divorce firm today to schedule an appointment.

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