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How is debt divided in a divorce?

On Behalf of | Feb 8, 2022 | Blog, Debt Relief |

If you are in the midst of a separation or divorce, you may be wondering how your debts will get divided.

Courts base these decisions on a case-by-case basis, but having a general understanding of the standards in Ohio can help prepare you for potential debt challenges.

What is equitable distribution?

Ohio is an equitable distribution state. This means that both marital assets and debts will get divided fairly and not necessarily equally. When considering a fair, or equitable, division of debts, there are numerous factors that can influence how the distribution will occur.

What is marital property?

Any property bought during the marriage and having a shared benefit is marital property. There are exceptions to this, but this is the general guideline for beginning considerations. Conversely, separate property includes anything owned prior to the marriage and items inherited or received as a gift.

How does this relate to debt?

Just as an asset can be marital property through acquisition during the marriage, debt can fall under the same classification system. Mortgages, credit cards, personal loans and many other types of debt that originated while married have the possibility of classifying as marital debts. However, no matter what a domestic court may order, your creditors are NOT party to the divorce. Any violation of the final decree could mean having to take your former spouse back to Court for contempt if he/she fails to pay a joint debt that he/she was ordered to pay. In the meantime, your credit can suffer, and you may or may not get them to pay the debt. Divorce decrees do not have the power to alter your liability to a 3rd party as creditors are not parties in the divorce case. The Court can order one spouse or the other assignment of debt, but that obligation is only binding between the parties to the divorce. If one spouse defaults, the other spouse is still subject to collection activity by the creditor if the debt is joint.

How will my debt get divided?

The specifics of your individual case will determine the final decision, but you can expect a few factors to come into consideration:

  • Income and financial circumstances
  • How the debt originated
  • Ownership retainment of assets associated with the debt

Keep in mind that equitable does not always mean equal when it comes to asset and debt distribution during a divorce. Because of the risk that joint debt could be assigned to your spouse, but he or she may not pay it, it is prudent to seek legal advice as to what you can do to protect yourself. Likewise, if you accept assignment of joint debt, but then default, your former spouse may pursue contempt charges to enforce the obligations under the divorce decree.


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