Dividing Debt Between Divorcing Couples
divorce can have a disastrous effect on your finances; in fact, it is among the
leading reasons stated by people who declare bankruptcy across the country.
While it is common to hear those who are involved in a divorce talk about
getting their fair share in the division of assets—such as the house,
cars, and anything else owned in common—it is less common to hear
about the equally important division of debts.
Don't let your divorce wreck your financial stability!
Contact Henrickson & Sereebutra for a completely free consultation with our Marietta divorce attorneys.
We can represent your best interests throughout the process of ending
your marriage and can work diligently to see that you are not left paying
for your former spouse's debts.
How is debt divided in a Georgia divorce?
The divorce courts in Georgia follow the principle of equitable distribution,
which seeks to divide marital property according to what is fair rather
than what is equal. For example, if you and your spouse share $100,000
debt, you will not automatically be ordered to pay $50,000 of it. Instead,
you might end up paying more than half—perhaps significantly more—if
your spouse demonstrates that you are primarily responsible for the debt,
such as through excessive credit card use, medical expenses, or gambling debts.
Similarly, you could avoid paying some or all of the debt if you can prove
that your spouse owed the money prior to your marriage. The determination
of who pays how much of the debt is largely up to the discretion of the
judge; therefore, it is highly advisable to hire a family law attorney
who is capable of making a persuasive argument on your behalf to help
you avoid being left with an disproportionate share of the debt.
To learn more about the process of debt division in Georgia, and how it
may affect your case, read answers to common questions below!
What is marital debt?
Unlike property, which can be categorized as marital and non-marital, all
debts acquired during the course of the marriage are "marital debt."
Even if you acquired debt under your own name (ex: you took out a credit
card alone), it would still be considered marital debt. For Georgia courts,
the only concern is determining what debts were incurred after the marriage
vows. Any debts that were in your name prior to the marriage will remain
your sole responsibility; your spouse will not have to help pay for them.
Are secured debts treated any differently?
Secured debts are those backed by some kind of collateral. So, a mortgage
might be an example of a secured debt, whereas debt from credit cards
would be considered unsecured. This matters as the courts may treat secured
debts differently depending on the other circumstances of the divorce.
For example, if you decide to keep the house after the marriage, you become
solely responsible for the 'debt' of the mortgage. If you intend
to keep possession of the collateral, you will need to refinance.
What if I want to pay off my debts?
Often, couples will take the opportunity of divorce to reorganize their
finances. In some cases, the courts may allow you and your spouse to eliminate
the debt completely through the process by selling off your assets to
pay them off. This way, both parties can have a fresh start.
How will debt division affect creditors?
It is crucial to remember that divorce orders do not overrule contract
law. So if your debt is in both of your names and the court orders it
to be split 60 / 40 between your spouse and you, the creditors still have
the option of coming after you if your ex-spouse fails to make their payments.
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Accurately determining who is liable to pay certain amounts can be challenging,
particularly in a marriage of long duration where the spouses financial
affairs have become extensively intermingled. You therefore may need to
work with a professional financial advisor or accountant. In more complex
cases, it may even be to your advantage to avoid having the judge intervene
in the matter by pursuing
mediation or even a
collaborative divorce to achieve an out-of-court settlement.