How is debt divided in a divorce?

On Behalf of | Sep 30, 2021 | Divorce |

Many people who get divorced often wonder how debt gets divided in New Hampshire. Debt can be very complicated, and you to understand the basics before you begin negotiations with your spouse. The most important thing to keep in mind are the several factors that determine this issue.

What type of debts you and your spouse have

The two most common types include secured debt and unsecured debt. Secured debt is when a creditor has some kind of collateral against the debtor in case he or she defaults on the credit agreement. These include things like mortgages and car loans. Unsecured debts are not tied to any type of collateral; they include things like credit cards. In a divorce where there are both types of debts, the creditor will go after the debtor who has more assets rather than going through each spouse’s separate property.

Whether or not the debt got accumulated before marriage or after

Debts that get accumulated before the marriage typically belong to whoever got it. For instance, if one spouse’s credit card covered joint expenses during a marriage, such as vacations and bills, then he or she will likely be the one responsible for half of any debt incurred on the account. If either party has debts that they incurred before he or she met their spouse, then these belong to them and might not get shared in the divorce unless there is some kind of fraud involved; that is, one partner hiding an account from his or her significant other.

How much each person has contributed to the debt

In many cases, the person who has contributed more to the debt will be responsible for it. This can also depend on whether or not your state follows equitable distribution in divorce law. In New Hampshire, for example, the court will look at who is more financially secure.

Getting a divorce can be a very complicated process, especially when there’s debt involved. However, understanding how debt gets divided in a divorce can help you have a smoother process and peace of mind.