Who Pays the Debt in a Divorce in Kentucky?

By Beverly Bird

Married people incur debt as a matter of course. They purchase homes and automobiles. They take out credit cards for emergency expenditures or luxuries. These balances don't go away if they divorce. One spouse – but usually both – must still pay them. Kentucky law divides debts between divorcing spouses in a fair and equitable way, not necessarily 50/50. You have a right to come to your own agreement regarding payment, and a Kentucky judge will probably approve it unless it's grossly unfair to one of you. Otherwise, you'll have to let the court decide.

Marital Vs. Separate Debt

Kentucky is an equitable distribution state, so no exact formula exists in its statutes for dividing either marital assets or debts. Courts are not required to divide everything 50/50; the state's code gives judges a lot of discretion in determining which spouse pays for what. The court's first challenge is to identify whether each specific account is marital debt or separate debt. It doesn't matter whose name is on the account. If the debt meets a variety of factors, a judge can consider it marital, meaning both of you owe it. Debts incurred before you married are typically the separate responsibility of the spouse who opened the account.

Division of Marital Debt

Kentucky judges take several factors into consideration when deciding whether to classify a debt as a marital obligation. One factor involves who enjoyed or benefited from the purchase or acquisition. If you financed a refrigerator for you home, it's probably marital. If you financed a trip to Europe, but you went alone and your spouse stayed home, it's probably your separate debt. Other factors include whether one of you took on the debt without the consent or knowledge of the other, and how capable you are of repaying it based on your income post-divorce.

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Post-Separation Debt

Just as debts taken on prior to your marriage are typically the separate responsibility of the spouse who incurred them, Kentucky courts draw a line regarding debts incurred post-separation as well. Separation can mean that you and your spouse moved to separate residences, you signed a separation agreement, or one of you filed for divorce. Typically, any debts taken after this time are the separate liability of the spouse who contracts for them. However, exceptions might exist if the debts relate to necessary living expenses before the divorce is final, particularly if the expenses benefited your children.

Post-Divorce Payment

It the court assigns certain debts to your spouse for payment, this doesn't necessarily protect you against creditors if the accounts are in joint names. Divorce law and consumer law are two separate things. A divorce decree does not bind your creditors. It doesn't supersede the contract you signed with your creditor, agreeing to repay a loan. The creditor can come after you for payment, even if your decree or marital settlement agreement assigns responsibility for payment to your spouse. If your spouse doesn't pay, the delinquent history will appear on your credit report. If you have to make the payments yourself to protect your credit history, you can usually take your ex back to family court to enforce the terms of your divorce decree. Typically, the court would order your spouse to reimburse you. You can also go back to court to enforce the terms of your decree if you don't make payment yourself.

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How Is Marital Debt Divided in a Divorce in Georgia?
 

References

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If your credit is iffy, or you don't have much of a credit record, the logical step is to ask a friend or family member to cosign on a loan for you if you need financing. If you're married, it makes sense that you and your spouse will take out certain loans together. In either case, if you can't repay the debt, the person who signed with you is usually responsible for paying it instead. An exception exists if you file for Chapter 13 bankruptcy protection, however.

What a Separation Agreement Covers

If you and your spouse are drafting a separation agreement in anticipation of divorce or just living apart, it's usually better to say too much than too little. These documents – also called marital settlement agreements or property settlement agreements in some states – can be unique to your personal concerns, so the more detail the better. When you decide to proceed with a divorce, having a signed agreement makes your divorce uncontested. If you've covered everything, there's nothing left for the court to do but approve it and grant your divorce. A judge will usually do so unless he thinks it's unfair to you, your spouse or your children.

What Assets Are Protected From Divorce Settlements?

Divorce courts in all states recognize that some property is solely yours, immune from distribution in a divorce. If you must go to trial where a judge will divide marital property for you, the law protects these assets. If you and your spouse negotiate a settlement, you can usually do anything you like with your property and the court will approve your agreement. If you want to follow the letter of the law when you create your settlement agreement, several rules determine what constitutes separate, protected property.

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