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              |  | Debt Allocation
In connection with the division of marital property in a divorce, the court has the authority to allocate responsibility for marital debt between the parties. Marital debt can include (but is not limited to) credit cards, lines of credit, mortgages, home equity and home improvement loans on your house and other real estate, and car loans. Marital debt attributable to a specific piece of property generally follows the property into the hands of one of the parties to a divorce. For example, a loan secured by a car is generally made the responsibility of the party to whom the car is awarded, just as the mortgage is generally made the responsibility of the party to whom the house is awarded. Marital debt not attributable to a specific piece of property can be divided between the parties by the court in almost any equitable manner, based on, for example, which party had the benefit of the debt, the purpose for which the debt was incurred and which party is better able to pay the debt. Individual debts (that is, debts for which only one party is legally responsible) generally continue in a divorce to be the responsibility of that party. Joint debts (that is, debts for which both parties are legally responsible) are generally allocated in a divorce to one party or the other. However, keep in mind that a joint debt allocated to your spouse in a divorce nevertheless remains a joint responsibility after your divorce is final, and the creditor continues to have the right to collect from both parties after the divorce, despite the Court's order. This is because a divorce proceeding cannot change the creditor's rights, since the creditor is not a party to your divorce case. Thus, you should not assume that just because the divorce court has made your spouse responsible for a joint debt, you have no further liability for it: you may still have to pay it if your spouse fails to do so after the divorce. Further, keep in mind that the property division is final when entered, and cannot be changed after the divorce, except in limited circumstances, and that the filing of bankruptcy by one of the parties after the divorce generally is not a reason to change the property division in the divorce. Thus, if the divorce court makes your spouse liable for a joint debt and your spouse files bankruptcy after the divorce, not only could you still have to pay the joint debt, but you would not be allowed to change the division of the assets to compensate you for the loss. Any information contained on this site is general in nature. You should not rely on any articles, postings or other information on these pages as legal advice or to create an attorney-client relationship. If you are in need of legal advice concerning a particular matter, you are encouraged to contact Kevin Fitzgerald, Attorney at Law, by e-mail at fkevin@iaxs.net or by telephone at 952/941-5767. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Nothing contained anywhere in this website should be construed as an offer to provide, or the solicitation of an offer for, legal service, if doing so in this manner violates or could violate any law or code of professional responsibility currently applicable in the jurisdiction in which this website is read or viewed. | |
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