All spouses know that a significant part of the divorce process involves the division of marital wealth. For many couples, only matters of child custody are more important. While Colorado spouses may spend a great deal of time and effort considering which assets they wish to pursue during negotiations, far fewer understand the manner in which debt is handled during divorce.
Debt is also subject to division during the divorce process, although the exact manner in which debt is parceled out will vary from state to state and even from one case to another. In general, however, accounts that are jointly held or are used for the purpose of purchasing items or services for the family are subject to division within the divorce. In terms of credit card debt, the total outstanding balance is often divided equally, unless one spouse can show that the expenses were used for purposes outside of the marriage.
When it comes to debt acquired by each individual prior to getting married, the issue is far clearer. Debt that is taken on before marriage, such as credit cards, auto loans or other lines of credit are usually considered to be separate from marital debt. Each spouse will retain the remainder of separate debt at the time of divorce. Student loan debt, however, is an area in which the matter is not always cut and dried, and many spouses who carry such debt will try to have those accounts included as marital debt.
When it comes to the division of debt, Colorado spouses should negotiate for an outcome that is fair and balanced. Once an agreement has been reached concerning the division of debt, it is important to remember to remove one's name from any account for which an individual is no longer responsible. This can help one avoid credit damage if the responsible party fails to make full and timely payments on those accounts after the divorce is made final.
Source: TIME, "What Happens to My Debt If I Get a Divorce?", Leslie Tayne, June 23, 2015