What Happens to Debt When You Get Divorced?

June 20, 2023

Ending a marriage is almost never easy. In addition to dealing with the emotional aspects of the split, there are often conflicts related to the division of assets, child custody, and more. One issue that can become especially complicated is determining who is responsible for debt. Connecticut is a common property state, meaning that assets and debts acquired during the marriage are divided equitably between spouses. It is often more complicated than you might expect. Getting sound legal advice and knowing your options can ensure that you aren't saddled with debt you can't pay.

Handling Debt Under Connecticut Divorce Law

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As in the majority of states, Connecticut awards assets and debts to divorcing couples based on 1.) when it was acquired and 2.) the legal owner of the property or debt. In other words, if you took out student loans before getting married, and the loans are in your name only, then that debt is your responsibility after the divorce.

The same principle applies to all debt, including credit cards, vehicle loans, and mortgages. Any debt incurred in the name of one spouse (or if one spouse is named on the title or lien for property) is that person's sole responsibility after the divorce.

Debt that is incurred by both spouses during the marriage is more complicated to manage, and this is where you need legal advice. Under common law, assets and debts are divided equitably between the spouses. Depending on your financial situation, the circumstances of your marriage, and other factors, this could mean that your spouse has to assume responsibility for more or less debt.

Protecting Yourself During a Divorce

As far as lenders are concerned, the person (or couple) listed on the account is responsible for paying the debt regardless of their relationship status. This means that even if the court determines that your former spouse is responsible for a debt, such as a car loan, if your name is still on the loan and they do not pay, your credit will suffer. If you can, pay off as much debt as possible and try to separate your finances before initiating divorce proceedings to simplify the process.

Your lawyer can provide legal advice on how to handle jointly owned property during your split. You may need to refinance a loan in your name only, or sell property and split the proceeds after paying off the debt. Your lawyer may also be able to help you with legal advice on how to remove your name from joint accounts that you can prove you do not use, such as a credit card.

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