Will I have to pay my ex-spouse’s debts?

On Behalf of | Jun 17, 2021 | Family Law |

Almost everyone across the country has debt to their name. Whether it is from student loans or auto loans, debt is a common reality for many households.

Debt can often already be a point of contention for spouses during the marriage, and even more so when they decide to divorce. But what happens to that debt in divorce?

Debts are included in the property division process

Assets are not the only things subject to division in a divorce under North Carolina law. Spouses must also divide their financial liabilities and debts, including:

  • The mortgage
  • Auto loans
  • Credit card debt

However, it is important to note that like other types of property, spouses or family courts will determine whether debts are marital or separate property. Loan agreements usually indicate who is responsible for the debt, so spouses can often easily determine separate debt.

On the other hand, any debt held jointly – such as credit card debt – can pose more of a challenge during a divorce. Spouses might have to calculate and divide the liability to repay this debt. There are some cases where one spouse might be responsible to pay a jointly held debt, particularly if there is proof they accrued most of the debt on a joint credit card, or if the other spouse pays another jointly held debt in the property division settlement.

Even so, since debts must be designated as marital or separate property, it is rare that one has to pay their ex-spouse’s debt after they end their marriage.

Are there ways to manage debt before divorce?

Many sources advise spouses that it might be helpful to pay off debt before they move forward with a divorce. While taking this step certainly can help mitigate the challenges that debt poses during the property division process, this is not always possible.

So, what can spouses do? Finances and debts are some of the most important things spouses should address as they move forward with a divorce. It can often help to:

  • Take a look at personal finances beforehand
  • Discuss debt responsibilities with one’s spouse
  • Negotiate a plan to handle debts proactively

It is also critical to reach out to financial organizations to inform them of any changes in liabilities. Responsibility for a debt assigned in a divorce settlement agreement will not transfer to the loan agreement automatically.

No matter what, it is essential that spouses take time to prepare themselves – and their finances – for a divorce.