Dealing with your spouse’s debt during a divorce

Arizona is a community property state, meaning assets and debts are equitably divided in a divorce. You may be responsible for your spouse’s debt during a divorce unless you can prove that your spouse incurred the debt before you got married.

This is frustrating for many fiscally responsible spouses going through divorce. However, there are some options for dealing with your spouse’s debt during divorce. And the legal team at Mushkatel, Gobbato, & Kile, P.L.L.C. is ready to help you explore them.

Am I Responsible for Debts My Spouse Acquired Before We Were Married?

In most cases, you are not responsible for your spouse’s debts from before you were married. If you can prove that your spouse acquired the debt before you married, that debt is considered separate and remains their responsibility after divorce. Some common examples of separate debt include:

• Credit card debt
• Student loan debt
• Individual car loans
• Personal loans

If your spouse took out a loan before getting married and your name is not on the loan as a co-signer or co-borrower, then this debt should remain your spouse’s responsibility.

Am I Responsible for Debts My Spouse Incurred While We Were Married?

Under Arizona law, debts acquired during marriage are community property. The community debts are divided equitably, even if only one spouse’s name is on the lending documents or the debt was acquired in another state. So if your spouse takes out a car loan, purchases property, or even gets a payday loan while you are married, those debts will likely be considered yours, too, during a divorce.

Are There Any Exceptions to the Community Debt Rule?

There are a few exceptions to Arizona’s community debt statutes, usually in cases where one spouse took on debt for their exclusive benefit. For example, if your spouse takes out a credit card solely in their name to use for an affair, then that debt could be considered separate debt. In that case, your lawyer may argue that your spouse’s debt exclusively benefitted your spouse and should not be your responsibility to pay.

What If I Paid Off My Spouse’s Debt Before We Were Divorced?

If you used your separate assets to pay off your spouse’s debt they incurred before marriage, you may have grounds to ask for a larger share of community assets. However, your case could get trickier if community assets were used to pay off separate debts. For example, if your spouse contributed non-monetarily to the household by being a stay-at-home parent and spouse, they may argue that the community assets were fairly used to pay off their debt.

Debt incurred by just one spouse during the marriage can be considered community debt, even if only one spouse’s name is on the loan. That means that paying off that debt could be seen as simply paying community debt. If so, you may not have grounds to petition for a larger share of community assets.

How Can I Protect Myself from My Spouse’s Debt?

If you suspect that your spouse is racking up debt before filing for divorce, you can take a few steps to protect yourself. Consulting a divorce lawyer is an excellent first step. An experienced attorney can evaluate your financial situation and advise you on your circumstances.

You can also take proactive measures, like checking your credit report every quarter or every six months. This could tell you whether your spouse is incurring debt that could be considered community debt.

If your spouse intentionally squanders community assets during the marriage, an Arizona court might consider this “marital waste.” If a judge determines that your spouse committed marital waste, they may award you a larger share of community property or agree that those debts are the sole responsibility of your spouse. However, proving marital waste can be challenging in community property states. If you believe your spouse is intentionally wasting your shared money, contact a family law attorney right away.

Can I Refinance Certain Debts to Remove My Spouse’s Name from the Debt?

If you have joint debt, which you both owe because both of your names are on the loan, then you may negotiate an agreement to separate the debt. For instance, spouses who own two vehicles and signed both car loans often have a car that they prefer to drive. In their divorce negotiations or mediation, they could agree to refinance their vehicle loans so that each one has a car in their own name.

What Happens If My Spouse Files for Bankruptcy After We Are Divorced?

Whether your spouse’s bankruptcy can affect you depends on which type of bankruptcy they filed and whether the filing was before the divorce was official. If they filed Chapter 13 bankruptcy after the divorce, this filing should have little effect on you. However, if your spouse files Chapter 7 bankruptcy for community debts they were assigned, their creditors may still come after you for the outstanding amount.

Contact an Arizona Divorce Lawyer

Do you need help dealing with your spouse’s debt during a divorce? Are you worried that the debt your spouse accumulated will impact your financial future? An experienced divorce attorney from Mushkatel, Gobbato, & Kile, P.L.L.C. can help you negotiate a fair separation of community debt and protect your separate property from being seized by your spouse’s creditors. Contact our firm today for a confidential consultation with one of our compassionate divorce attorneys.

Visit Our Arizona Divorce Law Offices

About the Author

Zachary Mushkatel

Zachary Mushkatel discovered his affinity for the law by chance. As a political science major at the University of Arizona, he first aspired to become a professor. But an unexpected invitation to participate on a mock trial team at the university encouraged him to turn his competitive spirit and drive…