Am I Liable for a Spouse's Debt Prior to a Divorce During Separation?

By Mary Jane Freeman

When couples decide to end their marriage, not only must they sort through the emotional entanglements that come with divorce, but financial ones as well. Typically, spouses live separate and apart in the days and months leading up to divorce, no longer commingling their lives or finances. However, this act of separation is not always enough to extinguish a spouse's liability for debts, including those made during the separation period leading up to divorce.

When couples decide to end their marriage, not only must they sort through the emotional entanglements that come with divorce, but financial ones as well. Typically, spouses live separate and apart in the days and months leading up to divorce, no longer commingling their lives or finances. However, this act of separation is not always enough to extinguish a spouse's liability for debts, including those made during the separation period leading up to divorce.

Basics

Spouses may be jointly responsible for debts and liabilities incurred during the marriage, commonly referred to as marital debt. Once the marriage ends, however, so does this joint liability: after the divorce, each ex-spouse incurs his or her own debts. The question then arises -- at what point during the separation or divorce process do the spouses stop incurring marital debt and begin to incur their debts separately? The answer depends in part on where you live.

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When Liability Stops

The criteria for determining when you are no longer responsible for new debt your spouse incurs varies. In some states, such as California, the law simply states spouses cease being responsible for the debts of the other as of the date of separation. Although a formula for determining this date is not provided by statute, relevant case law has revealed that courts consider a couple effectively separated the moment they begin holding themselves out to the public as separated, live their lives separate and apart, and don't engage in behavior that suggests the marriage has not ended, for example, by engaging in sexual relations or attending marriage counseling. In other states, such as New Jersey, your liability for your spouse's new debts stops as of the date the divorce complaint is filed.

Exceptions

If a spouse accumulates debts during the divorce process that are for necessities -- not luxuries -- for either himself or the children of the marriage, the court may assign these debts to either spouse, usually based on which one has the ability to pay. Debts considered "necessary" typically include food, shelter, transportation and medical bills.

Other Considerations

Even though you are getting a divorce, creditors may legitimately come after you for debts they consider jointly owned, for example, for credit cards held in both your names, even if the debt was incurred after your state considers your spouse liable for his own debts. Therefore, it's best to close all joint accounts as soon as you know you're divorcing. Additionally, creditors may also pursue you for your spouse's debts while you are still married, if they are unable to collect from him directly. You may be able to stop such collection efforts by asking the court to assign this debt to your spouse in your final divorce decree. However, with respect to joint accounts, creditors don't have to abide by the decree. One option is to pay the debt and take your ex-spouse back to court for reimbursement.

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What Happens to Unpaid Debt in a Divorce?

References

Related articles

Can Bankruptcy Clear My Ex Spouse's Debts After Divorce?

When a couple divorces, the court issues a divorce decree that divides assets and debts between the spouses, but either spouse can file bankruptcy after the divorce. If your ex-spouse files bankruptcy rather than paying the debts assigned to him in the divorce, you may have to deal with creditors of joint debts on which you are still listed.

Contingency Liability in a Divorce

Contingent liabilities are potential debts where a party's responsibility has yet to be determined. At the time you and your spouse separate pursuant to a divorce, you may have pending situations where the outcome will depend upon future events, leaving you unable to determine for sure the amount you will owe or even whether you will owe anything at all.

Community Property Laws & Credit Cards

Where you live largely determines how your credit card debt is split in a divorce. As a resident of a community property state, the court is likely to divide this debt equally between you and your spouse. However, under certain circumstances, this might not be the case. You also need to keep in mind that credit card companies are not bound by the debt allocation in a divorce decree.

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