March 20, 2025 • 13 mins
This episode explains that after a divorce, responsibility for debt depends on whether it was incurred individually or jointly during the marriage. Even if a divorce decree assigns debt to one spouse, creditors may still hold both parties liable for joint debts. To avoid complications, it’s important to close or refinance joint accounts and seek legal advice.
This episode is based on an article on our Multi-State Divorce and Family Law Blog titled: Is Your Former Spouse’s Debt Your Responsibility? To learn more or to schedule a consultation with our Houston divorce attorneys, call 855-805-0595 or email info@stangelawfirm.com.
Become a supporter of this podcast: https://www.spreaker.com/podcast/family-law-talk--6410781/support.
This episode is based on an article on our Multi-State Divorce and Family Law Blog titled: Is Your Former Spouse’s Debt Your Responsibility? To learn more or to schedule a consultation with our Houston divorce attorneys, call 855-805-0595 or email info@stangelawfirm.com.
Become a supporter of this podcast: https://www.spreaker.com/podcast/family-law-talk--6410781/support.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to Family Law Talk. Family Law Talk presented by
Kurt Stangy of Stangy Law Firm PC. Stangy Law Firm
is a multi state family law firm. Now here's your host,
Kirk Stangy.
Speaker 2 (00:18):
Welcome to Family Law Talk. We have an interesting topic today.
The topic is debt and divorce and this episode today
is based on an article on our blog on Stangy
Lawfirm dot com dated February fourth, twenty twenty five, and
the title of that article is is your former spouse's
debt Your responsibility? So it's a follow up to the
(00:41):
episode today. Going over to our blog and read this
article on the same topic for more information. But let's
go ahead and jump into the topic at hand. When
parties get married, they can come into it in different
financial states. Right. Some people come into marriage with a
lot of assets and not a lot of debt. Some
people come into a marriage and they've got a lot
(01:02):
of debt and they don't have a whole lot of assets.
And so when parties decide to get married, then there
can be a concern about the debt if one or
both parties are bringing debt into the marriage itself. And
then on the flip bend. At the conclusion of a divorce,
there can be a lot of negotiation, a lot of
rank or in terms of who's going to take the debt,
(01:24):
and is the debt marrial debt, is the debt separate debt,
and how does all of this work out? And obviously,
when we're talking about debt, there can be all kinds
of debt that individuals have coming into marriage or leaving
a marriage, from credit card debt, student loan debt, could
be medical debt, it could be simply the mortgage to
(01:44):
the house. It could be notes for vehicles that the
parties own, and there could be lots of other debt
that individuals have as well, from personal loans to business loans,
you name it. There are a lot of possibilities in
terms of debt, and debt issue can be a big,
big issue. Lots of individuals are just worried about what
(02:05):
assets they're going to get, but the question about debt
can be a big, big deal that lots of individuals
want to know a whole lot about when they're contemplating
getting married or getting divorced. So there are some situations
where debt is typically going to be marital debt. Okay,
so joint debts if you will. And typically what we're
(02:27):
talking about here is any debt that was accrued during
the marriage itself. And what a lot of parties miss
is they think that the name on the debt itself
is dispositive. So if husband has a credit card in
his name or wife has a credit card in her name,
then they oftentimes think, well, I'm not responsible for that debt.
That debt is in their name. But if two individuals
(02:48):
are married at the time that this debt is accrued,
then it is technically marital debt. And the same rules
apply to assets. So any assets individuals get daring marriage
is going to be marital property in an equitable division
state right, So again, the assets could be in the
name of husband, that could be in the name of wife,
(03:10):
so husband could buy a car, wife could buy a
car and not put the other spouse's name on it.
But if it's acquired during marriage, it is still a
marital asset. Likewise, any debts acquired during the marriage or
going to be marital debts. Now debts that individual brings
into the marriage, So if they had it before the
(03:32):
marriage itself, then that would be separate debt, and from
a technical legal standpoint, that should be debt that they
take with them in the instance of the divorce, if
they brought that debt into the marriage, But obviously tracing
that debt and figuring out when it was accrued can
be a big, big issue. So, yeah, you're getting married,
(03:54):
and maybe you're marrying somebody theoretically who's not good with money,
and they run up a whole lot of debt. That
can be a big problem for the other spouse. I mean,
even if the other spouse isn't somebody who runs up
a lot of debt, who isn't a big spender, if
their spouse is, that can create a big problem in
the instance that a divorce later takes place, and it's
(04:16):
definitely something somebody has to think long and hard about. Now.
One are the other questions that can come in the
text of divorces, Well, what occurs in an instance where
one party's engaging in wasteful dissipation or they're just spending
in a way that is just really irresponsible and they're
running up a bunch of debt. Maybe the other spouse
(04:38):
doesn't know anything about it, They didn't endorse this. The
other spouse you know, maybe they have a gambling problem,
maybe they have a drinking problem, maybe they just have
a problem in general with spending, and they spend lots
of money, and so the other spouse is often asking
if anything can be done in these kinds of instances,
(04:58):
and the answer to that question, maybe it is possible
in a divorce to argue that the other parties engaging
in wasteful behavior, wasteful dissipation, and so it is possible
to ask for that spouse to be responsible for that
debt if the other spouse had nothing to do with it.
(05:20):
But from a technical standpoint, it's still marital debt. It's
still a debt that was accrue during the marriage. So
the court has to resolve that issue. But it doesn't
necessarily mean that the court is going to divide that
debt in half and give each spouse half. It's possible
that one spouse could argue that this was wasteful, this
was their own behavior, trying to argue that they should
(05:42):
take on that debt, but it's not an absolute. Courts
don't always do that, and so it is a reality
that when two individuals get married, they become one person
or the eyes of the law, So if one party
is running up a bunch of debt, it could be
a problem for the other spouse. All right, So let's
go ahead and jump into some other questions individuals have
when we get into the topic of divorce, and one
(06:04):
of the big ones is this, which is are you
responsible for your partner's debt after a divorce? So, once
you get divorced, do you have any responsibility for the
debt that they accrue? And the technical answer to that
is normally no. In a divorce, the court's going to
divide the marital property and the debt, and this could
(06:25):
be by agreement in a settle case, or it could
be that the judge does it after a trial. And so,
from a technical standpoint, the debt that somebody accrues after
a divorce, at that point the marriage is dissolved and
they shouldn't be held responsible for it. But there are
some quirks, and there are some things parties need to
be very careful about. I mean, one of the big
(06:46):
ones I've seen is in the instance where the parties
owned a home and they had a mortgage and both
their names are on the mortgage, and then one of
the spouse is going to keep the home. The other
spouse is going to move out. And I've seen the
scenario nenumerous times where then parties do the divorce may
bee pro say by themselves, they don't hire warriors, and
so then there's no clause in the divorce settlement requiring
(07:09):
the party keeping the house to refinance it to remove
the other spouse's name off the house. And then years later,
let's say the spouse keeping the house stops paying the
mortgage and then there's a foreclosure action. Well, look, if
the other spouse's name who's not keeping the home isn't
removed off the mortgage, they're still on the hook. The
(07:31):
mortgage company isn't going to care that the parties are
divorced and that the one spouse is keeping the home.
If both parties name is on the mortgage, the mortgage
company is going to go after both the parties. Okay,
So what's really important is that if there's debt at
the time of the divorce and one spouse has taken it,
that the other party's name is removed from it, and
(07:51):
that there's some clause in the divorce judgment requiring that
that take place. Otherwise a party could be in trouble
down the line, and their credit could be impacted. And
this can be a big, big issue. It's a big
reason to hire a lawyer when you're going through a divorce,
even if you think it's going to be an easy
in a settled case. All right, let's go through some
other questions. What debts are considered merial debts? Again, in
(08:14):
an equitable division state, any debts acquired during the marriage
or going to be marital debts, and that would include
just about anything, you know, I mean, it could be
credit card debt, could be student loan debt, could be
that one party bought a vehicle, could be that one
party took a personal loan. If parties are married and
that debt is accrued during marriage, then it's marital debt.
(08:36):
And the only real exception of that would be in
a situation where there's a post nuptial agreement that the
parties had and they agreed in writing that you know,
these are your debts, these are my debts, and there
isn't going to be a blending of these debts. But
in the absence of that, anything, any debt accrued during
marriage is going to be marital debt. All right, So
(08:57):
The next question a lot of individuals have, is asset
and debt division always equal, So the courts in an
equitable division state always divide this in half. And the
answer to that question is not necessarily in an equitable
division state, okay, courts divide marital property and marital debt
in a just manner when considering certain factors. Okay. And
(09:20):
each state it has a statute that's going to deal
with property and debt division, and courts can look at
all kinds of things, including the length of the marriage,
each spouse's earning capacity. It could be tax consequences, it
could be other factors. In some states, could be marital misconduct.
In other states that's not allowed. Okay. So look, dividing
(09:42):
property and debt isn't just a straight fifty to fifty.
It's not a deal where it's like a butcher just
chopping it in half and each party gets half. And
this is something a lot of individuals miss. They think
that everything is always going to be divided in fifty
to fifty, and that's not necessarily the case, which is
why parties should have a lawyer. I think most judges
would start kind of with it. The idea that fifty
(10:04):
to fifty is a good general presumption, but doesn't mean
that's where the court's going to end up. In some cases.
It could be fifty five to forty five. It could
be sixty forty, it could be seventy thirty. Obviously, courts
got to rely on factors to do an unequal division.
But it's not necessarily just a fifty to fifty kind
of division of marital property and debt. All right. Another
(10:24):
question individuals have is what's the difference between marital and
separate property. Again, separate property separate debt is something somebody
had before the marriage, right, so they accrued it before
the marriage. And then there's other possibilities too, Like they
inherited some property, it was gifted to them, let's say,
(10:46):
or it was delineated by a prenuptial agreement, post nuptial agreement,
that kind of thing. But otherwise, all property and debt
in an equitable distribution state is going to be presumed marial, okay,
And so that is very very important for individuals to
understand and to keep in mind. All right. So again
(11:08):
trying to give you a summation of how debt works. Again,
debt that parties bring into the marriage is typically their own.
Debt accrued during marriage is typically going to be marital debt.
It doesn't matter whose name is on that debt. Ways
around that would be a prenuptial or a post nuptial
agreement something like that, But in a general sense, debt
(11:32):
accrued during marriage is going to be marital and it's
important if you're going to be getting divorced and there's
a lot of debt that there's a lot of clarity
and the divorced judgment indicating who's taking what debt. And again,
if the debt is in both parties name and one
party is going to take it, it's almost always vital
to have the other party's name removed from the debt, okay,
(11:53):
And that could be through a refinance, that could be
through an assumption agreement, which is something I've seen in
the past, and there's potential other possibilities as well. But
one thing parties definitely don't want is if they're not
going to be responsible for the debt. I mean almost always,
they're not going to want their name remaining on that
debt because if the other spouse doesn't pay, then the
(12:14):
divorced judgment isn't going to prevent the creditor from coming
after them as well. All right, so definitely an interesting
topic one I wanted to cover here today. As a
follow up to the episode, go on over to our
blog on Stangy Lawfirm dot com. Read the article titled
is your former spouse's debt Your Responsibility? The date of
the article is February fourth, twenty twenty five. This will
(12:35):
give you more information. But thanks for tuning in today,
stay tuned our next episode of Family Law Talk coming up.
Thank you very much.
Speaker 1 (12:43):
Thank you for listening to Family Law Talk with Kirk Stangy.
Is it Stangy Lawfirm dot com for more about today's
topic or to put Stangy Law Firm to work for
your family today. The choice of a lawyer is an
important decision and should not be based solely on advertisements.
Neither this spreame Court of Missouri or Illinois reviews, or
approve certifying organizations or specialist designations. The information you obtained
(13:06):
in this podcast is not, nor is it intended to
be legal advice. You should consult an attorney for advice
regarding your individual situation. We invite you to contact us
and welcome your calls, letters, and electronic mail. Contacting US
does not create an attorney client relationship. Please do not
send any confidential information to US until such time as
an attorney client relationship has been established. As the results
(13:28):
afford no guarantee of future results. In every case is
different and must be judged on its own merits. Kirk
Stangy is responsible for the Content Headquarters Office one twenty
South Central Avenue, Sweet four fifty, Clayton, Missouri six three
one oh five. Kirk Stangy is licensed in Missouri, Illinois,
and Kansas
Welcome to Family Law Talk. Family Law Talk presented by
Kurt Stangy of Stangy Law Firm PC. Stangy Law Firm
is a multi state family law firm. Now here's your host,
Kirk Stangy.
Speaker 2 (00:18):
Welcome to Family Law Talk. We have an interesting topic today.
The topic is debt and divorce and this episode today
is based on an article on our blog on Stangy
Lawfirm dot com dated February fourth, twenty twenty five, and
the title of that article is is your former spouse's
debt Your responsibility? So it's a follow up to the
(00:41):
episode today. Going over to our blog and read this
article on the same topic for more information. But let's
go ahead and jump into the topic at hand. When
parties get married, they can come into it in different
financial states. Right. Some people come into marriage with a
lot of assets and not a lot of debt. Some
people come into a marriage and they've got a lot
(01:02):
of debt and they don't have a whole lot of assets.
And so when parties decide to get married, then there
can be a concern about the debt if one or
both parties are bringing debt into the marriage itself. And
then on the flip bend. At the conclusion of a divorce,
there can be a lot of negotiation, a lot of
rank or in terms of who's going to take the debt,
(01:24):
and is the debt marrial debt, is the debt separate debt,
and how does all of this work out? And obviously,
when we're talking about debt, there can be all kinds
of debt that individuals have coming into marriage or leaving
a marriage, from credit card debt, student loan debt, could
be medical debt, it could be simply the mortgage to
(01:44):
the house. It could be notes for vehicles that the
parties own, and there could be lots of other debt
that individuals have as well, from personal loans to business loans,
you name it. There are a lot of possibilities in
terms of debt, and debt issue can be a big,
big issue. Lots of individuals are just worried about what
(02:05):
assets they're going to get, but the question about debt
can be a big, big deal that lots of individuals
want to know a whole lot about when they're contemplating
getting married or getting divorced. So there are some situations
where debt is typically going to be marital debt. Okay,
so joint debts if you will. And typically what we're
(02:27):
talking about here is any debt that was accrued during
the marriage itself. And what a lot of parties miss
is they think that the name on the debt itself
is dispositive. So if husband has a credit card in
his name or wife has a credit card in her name,
then they oftentimes think, well, I'm not responsible for that debt.
That debt is in their name. But if two individuals
(02:48):
are married at the time that this debt is accrued,
then it is technically marital debt. And the same rules
apply to assets. So any assets individuals get daring marriage
is going to be marital property in an equitable division
state right, So again, the assets could be in the
name of husband, that could be in the name of wife,
(03:10):
so husband could buy a car, wife could buy a
car and not put the other spouse's name on it.
But if it's acquired during marriage, it is still a
marital asset. Likewise, any debts acquired during the marriage or
going to be marital debts. Now debts that individual brings
into the marriage, So if they had it before the
(03:32):
marriage itself, then that would be separate debt, and from
a technical legal standpoint, that should be debt that they
take with them in the instance of the divorce, if
they brought that debt into the marriage, But obviously tracing
that debt and figuring out when it was accrued can
be a big, big issue. So, yeah, you're getting married,
(03:54):
and maybe you're marrying somebody theoretically who's not good with money,
and they run up a whole lot of debt. That
can be a big problem for the other spouse. I mean,
even if the other spouse isn't somebody who runs up
a lot of debt, who isn't a big spender, if
their spouse is, that can create a big problem in
the instance that a divorce later takes place, and it's
(04:16):
definitely something somebody has to think long and hard about. Now.
One are the other questions that can come in the
text of divorces, Well, what occurs in an instance where
one party's engaging in wasteful dissipation or they're just spending
in a way that is just really irresponsible and they're
running up a bunch of debt. Maybe the other spouse
(04:38):
doesn't know anything about it, They didn't endorse this. The
other spouse you know, maybe they have a gambling problem,
maybe they have a drinking problem, maybe they just have
a problem in general with spending, and they spend lots
of money, and so the other spouse is often asking
if anything can be done in these kinds of instances,
(04:58):
and the answer to that question, maybe it is possible
in a divorce to argue that the other parties engaging
in wasteful behavior, wasteful dissipation, and so it is possible
to ask for that spouse to be responsible for that
debt if the other spouse had nothing to do with it.
(05:20):
But from a technical standpoint, it's still marital debt. It's
still a debt that was accrue during the marriage. So
the court has to resolve that issue. But it doesn't
necessarily mean that the court is going to divide that
debt in half and give each spouse half. It's possible
that one spouse could argue that this was wasteful, this
was their own behavior, trying to argue that they should
(05:42):
take on that debt, but it's not an absolute. Courts
don't always do that, and so it is a reality
that when two individuals get married, they become one person
or the eyes of the law, So if one party
is running up a bunch of debt, it could be
a problem for the other spouse. All right, So let's
go ahead and jump into some other questions individuals have
when we get into the topic of divorce, and one
(06:04):
of the big ones is this, which is are you
responsible for your partner's debt after a divorce? So, once
you get divorced, do you have any responsibility for the
debt that they accrue? And the technical answer to that
is normally no. In a divorce, the court's going to
divide the marital property and the debt, and this could
(06:25):
be by agreement in a settle case, or it could
be that the judge does it after a trial. And so,
from a technical standpoint, the debt that somebody accrues after
a divorce, at that point the marriage is dissolved and
they shouldn't be held responsible for it. But there are
some quirks, and there are some things parties need to
be very careful about. I mean, one of the big
(06:46):
ones I've seen is in the instance where the parties
owned a home and they had a mortgage and both
their names are on the mortgage, and then one of
the spouse is going to keep the home. The other
spouse is going to move out. And I've seen the
scenario nenumerous times where then parties do the divorce may
bee pro say by themselves, they don't hire warriors, and
so then there's no clause in the divorce settlement requiring
(07:09):
the party keeping the house to refinance it to remove
the other spouse's name off the house. And then years later,
let's say the spouse keeping the house stops paying the
mortgage and then there's a foreclosure action. Well, look, if
the other spouse's name who's not keeping the home isn't
removed off the mortgage, they're still on the hook. The
(07:31):
mortgage company isn't going to care that the parties are
divorced and that the one spouse is keeping the home.
If both parties name is on the mortgage, the mortgage
company is going to go after both the parties. Okay,
So what's really important is that if there's debt at
the time of the divorce and one spouse has taken it,
that the other party's name is removed from it, and
(07:51):
that there's some clause in the divorce judgment requiring that
that take place. Otherwise a party could be in trouble
down the line, and their credit could be impacted. And
this can be a big, big issue. It's a big
reason to hire a lawyer when you're going through a divorce,
even if you think it's going to be an easy
in a settled case. All right, let's go through some
other questions. What debts are considered merial debts? Again, in
(08:14):
an equitable division state, any debts acquired during the marriage
or going to be marital debts, and that would include
just about anything, you know, I mean, it could be
credit card debt, could be student loan debt, could be
that one party bought a vehicle, could be that one
party took a personal loan. If parties are married and
that debt is accrued during marriage, then it's marital debt.
(08:36):
And the only real exception of that would be in
a situation where there's a post nuptial agreement that the
parties had and they agreed in writing that you know,
these are your debts, these are my debts, and there
isn't going to be a blending of these debts. But
in the absence of that, anything, any debt accrued during
marriage is going to be marital debt. All right, So
(08:57):
The next question a lot of individuals have, is asset
and debt division always equal, So the courts in an
equitable division state always divide this in half. And the
answer to that question is not necessarily in an equitable
division state, okay, courts divide marital property and marital debt
in a just manner when considering certain factors. Okay. And
(09:20):
each state it has a statute that's going to deal
with property and debt division, and courts can look at
all kinds of things, including the length of the marriage,
each spouse's earning capacity. It could be tax consequences, it
could be other factors. In some states, could be marital misconduct.
In other states that's not allowed. Okay. So look, dividing
(09:42):
property and debt isn't just a straight fifty to fifty.
It's not a deal where it's like a butcher just
chopping it in half and each party gets half. And
this is something a lot of individuals miss. They think
that everything is always going to be divided in fifty
to fifty, and that's not necessarily the case, which is
why parties should have a lawyer. I think most judges
would start kind of with it. The idea that fifty
(10:04):
to fifty is a good general presumption, but doesn't mean
that's where the court's going to end up. In some cases.
It could be fifty five to forty five. It could
be sixty forty, it could be seventy thirty. Obviously, courts
got to rely on factors to do an unequal division.
But it's not necessarily just a fifty to fifty kind
of division of marital property and debt. All right. Another
(10:24):
question individuals have is what's the difference between marital and
separate property. Again, separate property separate debt is something somebody
had before the marriage, right, so they accrued it before
the marriage. And then there's other possibilities too, Like they
inherited some property, it was gifted to them, let's say,
(10:46):
or it was delineated by a prenuptial agreement, post nuptial agreement,
that kind of thing. But otherwise, all property and debt
in an equitable distribution state is going to be presumed marial, okay,
And so that is very very important for individuals to
understand and to keep in mind. All right. So again
(11:08):
trying to give you a summation of how debt works. Again,
debt that parties bring into the marriage is typically their own.
Debt accrued during marriage is typically going to be marital debt.
It doesn't matter whose name is on that debt. Ways
around that would be a prenuptial or a post nuptial
agreement something like that, But in a general sense, debt
(11:32):
accrued during marriage is going to be marital and it's
important if you're going to be getting divorced and there's
a lot of debt that there's a lot of clarity
and the divorced judgment indicating who's taking what debt. And again,
if the debt is in both parties name and one
party is going to take it, it's almost always vital
to have the other party's name removed from the debt, okay,
(11:53):
And that could be through a refinance, that could be
through an assumption agreement, which is something I've seen in
the past, and there's potential other possibilities as well. But
one thing parties definitely don't want is if they're not
going to be responsible for the debt. I mean almost always,
they're not going to want their name remaining on that
debt because if the other spouse doesn't pay, then the
(12:14):
divorced judgment isn't going to prevent the creditor from coming
after them as well. All right, so definitely an interesting
topic one I wanted to cover here today. As a
follow up to the episode, go on over to our
blog on Stangy Lawfirm dot com. Read the article titled
is your former spouse's debt Your Responsibility? The date of
the article is February fourth, twenty twenty five. This will
(12:35):
give you more information. But thanks for tuning in today,
stay tuned our next episode of Family Law Talk coming up.
Thank you very much.
Speaker 1 (12:43):
Thank you for listening to Family Law Talk with Kirk Stangy.
Is it Stangy Lawfirm dot com for more about today's
topic or to put Stangy Law Firm to work for
your family today. The choice of a lawyer is an
important decision and should not be based solely on advertisements.
Neither this spreame Court of Missouri or Illinois reviews, or
approve certifying organizations or specialist designations. The information you obtained
(13:06):
in this podcast is not, nor is it intended to
be legal advice. You should consult an attorney for advice
regarding your individual situation. We invite you to contact us
and welcome your calls, letters, and electronic mail. Contacting US
does not create an attorney client relationship. Please do not
send any confidential information to US until such time as
an attorney client relationship has been established. As the results
(13:28):
afford no guarantee of future results. In every case is
different and must be judged on its own merits. Kirk
Stangy is responsible for the Content Headquarters Office one twenty
South Central Avenue, Sweet four fifty, Clayton, Missouri six three
one oh five. Kirk Stangy is licensed in Missouri, Illinois,
and Kansas
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