Most people in Maryland and across the country carry some type of debt. Some people may struggle with more negative debts, like outstanding credit card balances, and others may have good debts, like mortgage or auto loans. Whatever type of debt you have, you likely have concerns about how your divorce will affect it.
Many people focus on the who-gets-what part of divorce, and while wondering about your assets is wise, you do not want to overlook your debt. The property division process will address your liabilities as well as your assets, and you certainly do not want to end up with more than your fair share.
How is debt divided?
In some ways, debt division can come across as relatively straightforward. Unfortunately, it can have its complications as well. When it comes to the straightforward part, if you have accumulated debt in your name alone, you maintain the sole responsibility of that debt. This could include debt you accrued before getting married or loans you took out for a purchase that did not include your spouse or tie into the household. If you signed loan papers and your spouse did not, the debt will likely go to you.
As far as complications go, if your spouse took out a loan in his or her name but used the funds for the good of the household, the court may consider it joint debt. However, your spouse may have to offer proof that the funds went toward the household and not just for personal use for the court to reach that conclusion. The same goes for if you took out a loan and used it for the household.
Dividing joint debt
Many married couples have mortgage loans and other debt in both their names. The court can still divide joint debt between the two parties in efforts to come to a fair outcome. However, even if the court orders one person responsible for the debt, creditors do not abide by divorce decrees, which means they could still come after both parties to collect if the debt goes unpaid.
To start, you may want to inventory your assets and liabilities when preparing for your divorce. If you feel uncertain as to whether something is a joint debt or how the court may address certain debts, you can discuss the matter with a knowledgeable attorney. Your legal counsel could also help you come up with strategies for negotiating a favorable outcome for your property division proceedings.