Most people have at least some debt. It can be student loans, a mortgage, credit card charges, wedding costs or medical bills. When a couple divorces, what happens to these debts?

Just like other property – the house, vehicles, retirement accounts and other assets – debts are divided between the separating partners. If not handled with care, the division of debt can lead to future problems.

Marital debts are divided

Not every debt held by each spouse will be split during a divorce. There are separate debts and marital debts. Separate debt is debt you took on before the marriage.

Any debt either partner took on during the marriage is generally considered marital debt, regardless of who chose to spend the money. There are a few exceptions, including:

  • Student loans that were only spent on one party’s education and not used to support the household
  • Gambling debts
  • Money spent in the course of an extramarital affair
  • Restitution stemming from a criminal case

During divorce proceedings, marital debt is divided between the partners.

Preparing for a future with divided debts

As USA Today explains, paying off the debt in full before finalizing the divorce is often preferable. Not paying debts can create future complications. After the separation, even if you and your spouse agreed to take responsibility for certain debts, you remain legally on the hook for all of it. If your former partner stops paying, a creditor can still come after you, regardless of your divorce agreement.

When considering how to tackle debts ahead of a divorce, think about:

  • Cancelling any joint credit cards immediately to ensure the debt does not swell
  • Paying off existing debts right away, if possible
  • Using the debt in negotiations during property division
  • Writing debt payment oversight into any divorce agreement, allowing each partner to monitor the accounts for which the other agreed to take responsibility

The goal of property division is to split everything in a fair manner. Doing this with prized assets can be tricky. Debts often require even more negotiation and discussion. Taking the proper precautions now can save time and headaches.

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