Submitted by: Susan Chinweike – Umeh

In a Divorce, just as a couple must divide what they own, so they must divide what they owe. Generally, only a marital debt is divided during a divorce, which means that debt incurred for the joint benefit of the parties during the marriage. Joint benefit does not necessarily mean joint use.

It is important to know that whatever debt you incur for the marital benefit or on a joint loan account has the provision of equal division. Not all debts incurred during a marriage, however, are marital. Debt incurred through gambling, high living and reckless investment is not a joint responsibility, even when the obligation occurred during the marriage. In court, and however one must prove that a marital debt exists. Sometimes loan taken by a spouse on a credit card having both the names of the partners then they are liable to pay the debt even after a divorce.

Marital debts is divided in many ways, couples negotiating a divorce can pay it all off when the property is divided, or, they continue to service it jointly, or, they divide it and each take a share of responsibility. Sometimes it is difficult to go for the first option, since the marital debt may exceed the value of the total property. However, it is wise to do so since it removes any future complications in the matter. The second course of action is opted more often as this solves the problem of complex paperwork and calculation and legal issues. The last option is opted by those who do not have a dispute over the debts incurred during the marriage. The value of Business owned by spouse is an important aspect while filing for division of marital debts. Debts incurred in the business are also questionable. If an individuals spouse fails to pay off a car loan or a credit card bill for which the individual is co-signs then, the creditor can – and will – initiate collections against the individual. Therefore, it is very important that during a divorce settlement regarding the division of debts is completed properly.

Complications arise when after a divorce one of the spouse files bankruptcy. Loans taken are then screened for personal benefits and marital benefits subsequently. As mentioned earlier, couples are responsible for joint loans. Therefore, even if one files for bankruptcy the other will and has to pay the creditors for the joint loans taken. The division of marital debts must take place under the guidance of expert lawyers to avoid future complications and the process of division is for the optimized outcome for both the individuals involved. Equal division of the liabilities and assets places the responsibility of repaying a marital debt on both the individuals concerned. All home mortgage lenders will require refinancing before removing either spouse’s name from the mortgage. The mortgage lender will look solely at the financial situation and debt-to-income ratios of the re mortgaging spouse in determining eligibility for a new mortgage. Thus, mutual marital debt division is the best way of dividing marital debt.

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