Debt Division in Divorce: Navigating the Allocation of Debts and Liabilities Between Spouses

If you are considering a divorce, one of your main concerns might be how it will affect you financially. Divorce can be expensive, from lawyer’s fees to splitting money in your bank accounts to buying one spouse out of your house to paying child support and/or alimony. 

In addition to dividing up your property, you will also need to divide up your debts. Any debts that you incurred throughout your marriage will likely be considered joint liabilities that will be divided equitably. During divorce proceedings, courts will look at multiple factors when deciding how to divvy up debts fairly. With the help of a Quincy divorce attorney, you can also come to an agreement with your soon-to-be-ex about how to split your assets and liabilities.

At Infinity Law Group, we know that divorce can be complicated both emotionally and financially. If you are concerned about how divorce will affect you financially, we can help. Reach out to our law offices today to schedule a free consultation with a Massachusetts divorce lawyer. 

How Debt Is Divided in a Massachusetts Divorce

Massachusetts is not a community property state where property and debts acquired during the marriage are split 50-50. Instead, Massachusetts follows the rule of equitable division, where both marital assets and debts are divided equitably or fairly. 

To start the division of debts and assets, a court will first determine what is – and is not – marital property. Generally, all debts and assets are either marital or separate property. Marital property includes all items, interests, and possessions attained by a couple during their marriage – including debts. Separate property is usually anything that a couple has acquired before the marriage or that was gifted or bequeathed to them separately during the marriage (such as an inheritance to one spouse). Couples can also choose to designate certain property and/or debts in a prenuptial agreement.

Much like property, liabilities can be classified as marital or separate debts. Generally, a debt will be considered marital if it was acquired during the marriage and was used for a marital purpose. 

Once the court has determined what is a marital debt, it will then divide them in a fair way – which doesn’t necessarily mean 50-50. For example, if one spouse ran up a lot of credit card debt during a marriage on personal expenses, then they may be responsible for a greater share of that debt. Below, we break down some of the types of debt that a divorcing couple may have – and how these debts will likely be treated in the divorce process.

Mortgage

The family home is usually a marital asset – and may also be a joint liability. If a couple owns a house together, then they may still have a mortgage. If the house is titled in both parties’ names – and if the mortgage is in both spouses’ names as well – then it will be considered a marital debt subject to equitable distribution. In many cases, one spouse will buy out the other spouse’s interest in the house if they can do so. 

If only one spouse’s name is on the title of the house and the mortgage, then a Massachusetts court will look at several factors to determine liability for any house-related debt. For example, if the couple lived together in the house and decided to take out a home equity line of credit to renovate the kitchen, then that would likely be considered a joint debt.

Car Loans 

If you bought a vehicle during your marriage and have an auto loan, then this debt will likely be considered joint – particularly if the loan is in both spouses’ names. In this situation, you may choose to pay off the balance, sell the car, or refinance the loan to remove one spouse. One party may also buy out the other.

If you have a car loan for a vehicle purchased before the marriage, then it will likely be considered a separate debt. Your Quincy divorce attorney can talk to you about situations where your car loan could be considered a marital liability in a division of assets.

Student Loans

Student loans are generally considered a separate debt of the party who took out the loan for their education. However, there may be situations – such as when one spouse took out student loans for living expenses – where these loans may be considered marital debt.  A judge will then equitably allocate the liability.

Credit Card Debt

Any credit card debt that is run up during a marriage will likely be considered a shared debt and will be divided equitably. However, if the credit card debt was acquired before marriage, it will be considered a separate liability and not subject to division in a divorce.

Medical Debt 

Medical debt that was acquired during the marriage will likely be split equitably in a divorce. If the debt was acquired before the marriage or after the couple was separated, then it will likely be considered an individual debt. 

For joint medical debt, a court may also consider whether the debt was incurred for an elective versus essential medical procedure. Remember – the court will look at a variety of factors when determining how to make a fair division, including how the debt was incurred (for what purpose) and the financial situation of each party.

Work with a Quincy Divorce Lawyer

The division of debts in a divorce can be challenging. Whether a liability is considered a separate or marital debt – and how it should be divided – is a question that can either be decided by the court or separately through an agreement. Our law firm will advise you of your rights and how your debts will likely be split in a divorce so that you can make an informed decision on how to proceed.

Infinity Law Group represents clients in Boston, Needham, and Quincy, Massachusetts in all types of family law matters, including divorce. We work with our clients to help them understand their rights in a divorce case, including how the division of assets and liabilities may impact them financially. To learn more or to schedule a free consultation with an experienced divorce lawyer, call us at 617-250-8236 or fill out our online contact form.