At a Glance

Divorce already comes with so many complications—emotionally, physically, and socially. But sometimes, one of the most complicated things to hash out in a divorce is finances. If you and your significant other accrued debt during your marriage, you’ll need to figure out how debt is handled in a divorce. Here’s what you need to know.

Is one spouse responsible for the debts of the other?

In marriage, you agree to take the good with the bad, for richer or poorer, right? But does that go for debt too?

You may be asking “Am I responsible for my husband’s debts if we divorce?” The answer is: It depends. The answer is: It depends.

If you entered into a marriage with individual debts, those do not automatically become the responsibility of both parties. Where you may be held liable is if you enter into a joint debt with your spouse.

For example, say you and your spouse purchase a home together using a joint loan. But your spouse gets laid off and is no longer able to make payments. You both then are held liable for finding a way to make the mortgage payment or risk the repercussions of non-payment.

Related: Marriage and Credit Score

What happens to debt during a divorce?

When you and your spouse decide to start the divorce process, a big concern may be what happens to individual and shared debt. As with debt going into a marriage, what happens to debt leaving a marriage depends on your unique financial situation. And while there’s not a magic formula that courts use to split up debt following divorce, there are certain factors that influence it, including:

  • If you signed a prenuptial agreement. A prenup, a legal document agreed upon before you ever say “I do,” will outline what happens to debt following a divorce. Abiding by the terms of a prenup is definitely the most straightforward way to handle divorce debt. If you didn’t sign a prenup, other factors come into play.
  • Where you live. The rules in each state may differ when it comes to dividing assets and debts. While some states may divide assets and debts equally between partners, aka “community law,” others may focus on the assets and debts that each spouse entered into the marriage with, only dividing joint debt, aka “common law.”
  • If debts are marital or separate. As mentioned above, debts you have going into a marriage don’t automatically become marital property. So they may be your responsibility in divorce too. But if you and your spouse shared multiple loans, credit cards, or other debts as marital property, you’ll need to figure out the best way to split them up.

How to handle divorce debt

If you’re looking at strategically splitting up debt, there are a few options available.

  • Pay off debt first. One of the best ways to be sure debt is handled cleanly is to quickly get out of debt before officially divorcing. If paying off credit card debt and other shared marital debt is an option, it can ensure that both parties can separate without any negative financial implications.
  • Close joint accounts. During a divorce, it can be wise to close all shared accounts and open individual accounts instead. This can be especially helpful if you agree to split payments among spouses. For example, if you decide one partner is responsible for a car loan while the other takes care of the mortgage, it’s beneficial for both parties to switch those loans into only their names. That way, there won’t be negative repercussions on one partner’s credit score for non-payment by the other.
  • Consolidate debt. If you and your spouse accrued many debts during your marriage, it might make things easier to consolidate before you divide them. You can consider using a credit card balance transfer, home equity loan, or debt consolidation loan to help. There also are debt consolidation programs to assist with the process.
  • Let the law decide. If you and your partner aren’t on speaking terms or one partner isn’t willing to work at getting debts situated, it might be best to let attorneys hash out the terms of divorce debt.

Divorce debt FAQs

Do I have to disclose my debt in a divorce?

Yes, it’s your obligation to disclose all debt during the divorce process. This ensures both parties have accurate financial information to create the most appropriate division of both assets and debts.

Does divorce ruin your credit?

Simply getting divorced has no impact on your credit. Where things get tricky is during the splitting up of shared marital accounts. Any joint loans or lines of credit will continue to be in both spouses’ names (and impact both credit scores) until they’re changed to a single account holder.

How will the divorce impact my credit score?

The process of getting divorced will not have any impact on your credit score. But, your score may get dinged if there are missed or late payments resulting from confusion around who is now responsible for paying the debt. For example, if your divorce deems that your ex is responsible for paying off a joint debt, it’s wise to check to be sure payments are being made. Late and missed payments on a joint account could drag down your score too.

How to protect your credit during a divorce

The best way to protect your credit during a divorce is to draw clear lines of responsibility. That means working to pay off any shared debt before divorcing or moving any joint accounts to the name of a single account holder. Even though your divorce may be final, you’ll still be on the hook for any accounts in which you’re still listed as an account holder. And that means if payments aren’t being made on time, your credit could suffer too.