One of the most complicated parts about a divorce can be the untangling of assets acquired during the marriage. However, one type of community property that many couples forget to consider is marital debt. The division of debt involves assessing credit card bills, outstanding loans, and money owed to others. When divorcing, it’s important to understand how debt gets divided, so each partner carries a fair share.
How Debts Are Divided During Divorce
The state of Washington is a community property state. This means, when you get married, you’re agreeing that both partners have an equal interest in all assets and debts that either of you gain during the marriage—unless you have a prenuptial agreement that spells out otherwise.
Barring exceptional circumstances, the court likely will not consider that one spouse may have been a big spender in the relationship when it comes time for a divorce settlement. This can leave you responsible for up to half of the debt. However, there are a few times when the court may consider other options.
One factor that a Washington court is bound by law to consider during a divorce is the economic circumstances that each partner will be in after the division of property. The court’s goal is never to make either party destitute, and an equal share isn’t always a 50/50 split.
If the marriage didn’t last very long, the court will typically divide the assets in such a way as to restore the financial circumstances of each partner to what they were before the marriage. Keep in mind that debts incurred before marriage are still separate property and will stay with the person to whom they belonged, as well. Similarly, debt that has piled up after you’ve separated will stay separate.
For longer marriages, instead of restoring pre-marriage finances, the court will work instead toward equalizing the finances of each partner. That includes sharing the debt. However, you may be able to negotiate with your spouse for a lesser share of marital debt in exchange for other considerations such as a lesser share of marital property. A mediator or your divorce attorney may be able to help you with this.
What About Reckless or Excessive Spending?
In some cases, reckless spending can be an issue, although this may be difficult to prove in all but the most egregious situations. If the court finds that one partner has racked up debt that outweighs the contributions he made to the marriage, it may be decided that the debt is the separate property of the spender during the divorce, and you won’t be responsible for it.
How to Protect Yourself From Marital Credit Card Debt
One way some couples choose to deal with marital debt is to pay off credit cards and other debts before filing for divorce. However, this is not always possible for some couples. But for those who can afford to do this, it can help each of you begin your new lives with financial freedom. It can also take a potentially very stressful issue off the negotiating table before you ever set foot in a courtroom.
If you can’t pay off your shared credit cards early, some couples will choose to divide up the debt by transferring it to individual cards for each spouse and closing the joint account. This can save time and headache later during the divorce. However, if there are still joint accounts left open after the divorce, it’s wise to keep a close eye on them. Monitor those accounts and keep good records for your own financial protection. If your ex-spouse files for bankruptcy, you can be left solely responsible for the debt.
If you and your spouse still can’t agree about how to divide the debt, the services of a professional mediator may be able to help you find an arrangement that works for both of you.
Get Legal Help With Asset Division During Your Divorce
When in doubt, talk to your divorce attorney. He will have experience dealing with the courts, and will be able to tell you what the law says is fair.
If you have questions about asset division during your divorce and what will happen to your marital debts, The Law Offices of Molly B. Kenny can help. To speak with an experienced legal professional, call us by phone, or use the contact link on this page to arrange a private consultation in our Bellevue office.