In a divorce, courts treat debt the same way as assets. This means the debts you and your soon-to-be former spouse incur during the marriage are typically considered marital and will be divided between the both of you. Meanwhile, debts from before the marriage remain separate.
However, the division of marital debt is more complex than it seems. Whether you are planning for a divorce or currently undergoing one, consider these important aspects of debt division.
Connecticut uses an equitable distribution approach
In Connecticut, debt division follows an equitable distribution rule. Couples or courts divide debts in a way that is fair but not necessarily equal. The court considers several factors such as:
- Each spouse’s financial situation
- The purpose of the debt
- Who benefited from the debt
The goal is to reach a fair division based on you and your former spouse’s specific circumstances.
Different types of debt are divided based on fairness
You also have to consider the different types of debt incurred during your marriage. Here’s how you might handle various types of debt:
- Credit card debt: If you incurred this debt for marital purposes like household expenses, you usually consider it marital debt and divide it equitably. However, if one of you used a credit card for personal expenses, the court may assign that debt to the responsible individual.
- Mortgage: You often consider the mortgage on your marital home as marital debt. The division may depend on which one of you keeps the home.
- Car loans: Like a mortgage, car loans are typically assigned to the spouse who retains the vehicle.
- Student loans: Courts often treat these as separate debt, especially if you took out the loans before the marriage. However, if you or your former spouse took out these loans during the marriage and they benefited both of you, you may consider them marital debt and divide them equitably.
Generally, the equitable distribution approach divides or assigns the debt to reflect the financial circumstances and contributions of both parties.
You can negotiate these terms
While equitable distribution can make debt division more fair, it can complicate matters if you have a significant amount of marital debt.
Legal guidance is often helpful to ensure a fair outcome. An experienced attorney can help you assess each type of debt and negotiate the terms of division if necessary.
