Equitable Division of Marital Debts

Debt division is considered a subset of property division, and the legal standard for marital debt division is is the same as in the context of marital asset division - the division must be "equitable". See, Zekser v. Zekser, 293 Ga. 366, 744 S.E.2d 698 (2013). Accordingly, the analysis is the same as property division to the extent that the debts are first divided into separate debts (acquired before the marriage) and marital debts. They should then be further classified into sole debts (car notes or credit card bills that are only in one spouses' name) or joint debts (joint tax debt, co-borrowers on mortgage, or joint credit card bills).

Once all marital debts have been identified, there is no special rules for debt division other than to look at how the debts should be charged based on “equity” or fairness. This analysis will be case to case for every family and certainly requires the assessment of Atlanta Marital Debt Attorney Russell Hippe. All outstanding marital debts must be addressed, tax debts, credit card debts, business loans, mortgages on all real estate, everything that either party owes.

One common question is whether a divorce decree can change prior contractual agreements with creditors. For example, a party may contract in a settlement agreement to assume a debt of the other spouse or a court may order one spouse to pay the debts of the other. Does this change the prior contract with the creditor? No. If there is a default later, the creditor can still attempt to collect from or legally sue the spouse on the contract (for example the card holder agreement with Amex), irrespective of the divorce decree. (The aggrieved spouse may have contempt recourse against the spouse who breached the order to make payments in the decree, but the divorce decree “debt assumption” is not a valid defense to a subsequent creditor collection action on the original debt contract.)

It is common for the court to award / charge debts based on who incurred the debt and whether the debt was for general family spending or a business venture. Contact experienced Atlanta divorce attorney Russell Hippe when consulting about the equitable division of marital debts.