Suppose you’re contemplating or have already filed for divorce; you likely anticipate some complexity regarding the division of your marital assets and debts. One concern you might have is whether you are responsible for your spouse’s debt accumulated during the marriage.
In Pennsylvania, the laws governing the division of debt during divorce can be nuanced and depend on various factors. Understanding how these rules work can help you navigate your financial obligations during divorce as successfully as possible.
Marital vs. non-marital debt
Before determining who is responsible for paying debts, it is important to differentiate between marital debt and non-marital debt. Marital debts are loans acquired in the course of the marriage by either spouse. This can include:
- Joint credit cards
- Mortgages
- Car loans
- Loans acquired for the benefit of the household
On the other hand, non-marital debts are loans that one spouse accumulated before the marriage or after you separated. Additionally, some debts incurred during the marriage can be classified as non-marital if they were solely for one spouse’s personal benefit, such as debt from a hobby or personal luxury.
The general rule in the Keystone State is that you are not automatically responsible for paying your spouse’s debts after a divorce unless the debt was incurred for the benefit of the household or you cosigned for the loan or credit. However, if the debt is classified as marital, it will be part of the equitable distribution process, and you could be assigned a portion of it.
Equitable distribution in the Keystone State
In Pennsylvania, assets and debts are subject to a fair, but not equal, division. When diving assets and debts, courts consider several factors, including:
- The length of your marriage
- You and your spouse’s income
- Financially and non-financially contributions to the household
The court’s goal is to distribute marital property and debts in a just and reasonable way, but that does not mean all assets and debts are split down the middle. Every case is unique, and the court has discretion in deciding how debt will be allocated.
While you are not automatically liable for your spouse’s debts, any debt accumulated during your marriage will be subject to the court’s discretion when it divides marital property and liabilities, if you and your spouse cannot settle these matters without judicial intervention. Familiarizing yourself with how marital debts are divided can help you prepare for the financial implications of a divorce and help ensure a fair outcome.
