Am I responsible for my spouse’s debt in a divorce in Arizona

Arizona is a community property state. That means when a couple divorces, spouses divide property and debt accumulated during the marriage. Community debts are typically fairly divided.

This must be very frustrating for a spouse who may have filed for divorce because of financial issues. However, the advice and representation of an experienced divorce lawyer can help you achieve a divorce settlement to protect your financial interests.

What Is the Definition of Community Property?

Arizona law defines community property as all property and assets acquired by a married couple during the marriage. It provides a few exceptions, however. Property that falls into one of the following categories remains the separate property of the owning spouse:

• Property acquired after filing a petition for divorce, legal separation, or annulment
• Property that was a gift or inheritance

However, the law prevents community property from being used to acquire separate property after filing an annulment, divorce, or separation. It also protects the status of pre-existing community property. That means simply filing a divorce will not change the legal status of any shared bank accounts, property, real estate, or retirement and investment accounts.

What Are Separate, Joint, and Community Debts?

Any debt acquired during a marriage is considered community debt. Usually, it doesn’t matter which spouse acquired the debt. This could include debt that many people would consider individual debt, such as:

• Credit card balances
• Student loans
• Auto loans
• Payday or similar short-term loans
• Personal bank loans

Separate debt is debt that each spouse incurred before the marriage. Separate debt remains the responsibility of the spouse that incurred it.

Both spouses agree to joint debt. It could be a car loan with both names on it or the mortgage for the family home. Joint credit cards and personal loans are also joint debt, as both spouses applied for the debt. Both community and joint debt will be divided in a divorce.

Will Community Debt Be Divided Equally Between Us?

Community debt is divided equitably by a judge, not necessarily 50/50. Distributing the burden of debt can be a factor in divorce negotiations. If you incurred a debt during the marriage, then it is community debt and should be fairly divided. However, certain factors can affect the exact division of debt, such as when one spouse wants to keep the home. An Arizona divorce lawyer can help determine if any of these factors may apply to your case.

Do I Have to Pay for Debt My Spouse Acquired Before We Were Married?

Arizona law protects separate property belonging to one spouse from being used to settle the other spouse’s separate debt from before the marriage. However, community assets may be used to pay separate debt acquired before the marriage in some cases.

For example, you may have had student loans when you got married. But if you worked during the marriage or otherwise contributed, you could use community assets to settle those debts. However, you cannot use your spouse’s separate assets to pay off your separate debt.

This can get complicated quickly. The law also states that to use community assets to settle pre-marital separate debt, the debtor spouse must have contributed correspondingly to the union. A divorce attorney can help establish the monetary value of your contributions and justify using community assets to settle separate debt during divorce negotiations. This can be especially helpful for intangibly valuable assistance provided by stay-at-home spouses.

Am I Responsible for My Spouse’s Debt If They Stop Paying It?

If both names are on the debt, such as a joint car loan or joint mortgage, you would be responsible for the debt if they stop paying their share. If you’re concerned that your spouse isn’t going to pay their share of the debt, then part of your divorce negotiations can include offering to sell your portion of the asset to your spouse and restructuring the loan so that it’s solely in their name. Or you could offer to buy out your spouse’s share of the property and place the loan in your own name.

If the joint debt is allocated to your spouse per your divorce agreement and your name is not on it, it is no longer your responsibility. For example, if you restructured a car loan so it’s in your spouse’s name and not yours, the lender can only come after your spouse or seize their separate assets to settle the debt.

What Happens If My Spouse Files for Bankruptcy After Divorce?

You may be liable for debt if your spouse agrees to pay debt associated with community property and files Chapter 7 bankruptcy. Your spouse’s debt liability is discharged, but the creditor doesn’t consider the debt paid. The creditor may file collection actions against you or garnish your wages to satisfy the debt.

However, you should not be affected if your spouse has separate debt and files bankruptcy because they cannot pay it. If your spouse files for Chapter 13 bankruptcy, their debts are organized into a three to five-year payment plan. This plan is their sole responsibility. You could be affected if your spouse is behind on child support payments, though. Those debts are included in the payment plan. The bankruptcy court will structure the payments so the child support debt will be paid in full by the end of the payment arrangement. But if your spouse misses the payments, their bankruptcy case could be dismissed. This dismissal could mean you wouldn’t receive the outstanding child support.

Contact an Arizona Divorce Lawyer

Do you need help negotiating the allocation of community debt in the divorce process? A skilled Arizona divorce lawyer can protect your fiscal interests, negotiate a fair division of debts and assets in a divorce, and support you through this emotional time. Call Mushkatel, Gobbato, & Kile, P.L.L.C. today for a free, confidential consultation with one of our experienced 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…