There are few families in Ohio or elsewhere that do not have some amount of debt. This may include mortgages, credit cards, student loans and personal loans. If you and your spouse struggle each month stretching your paychecks to cover your debts, you know how stressful this can be. In fact, finances, including debt, are often the cause of marriage breakups.
No matter the root of your decision to divorce, you now have many decisions to face. Among them is the division of your assets, including your house, vehicles and personal belongings. However, an important part of dividing your households is separating your joint debts. Undoubtedly, you and your spouse pooled your resources to obtain loans, especially if one of you had a better credit rating. It is important that you understand how the court divides marital debt.
Understanding debt division
Ohio is one of many states that divide marital assets equitably. This does not always mean spouses each receive 50 percent of the assets; instead, it means that the court will divide the assets fairly between the two, taking into consideration their separate incomes and other factors. The same is true for joint debts. Just as any assets accumulated during your marriage are jointly owned, so, for the most part, will you and your spouse share joint responsibility for your debts. However, the court will look closely at certain factors, for example:
- If one of you spent recklessly, incurring substantial debt, the reckless spouse may be solely responsible for that debt.
- During property division, if you obtain an asset with a debt attached, such as a car with an outstanding auto loan balance, you may also acquire the responsibility for paying the loan.
- The court may simply split joint credit card balances unless you and your spouse can arrange a division of debt with the credit card company.
- If your spouse gets the house during property division, you may want to encourage him or her to refinance, removing your name from the mortgage.
- Student loans separately obtained may remain separate unless you made sacrifices to pay off your spouse's debt while yours remains.
The dangerous part of dividing joint debts is that your name may stay on an account that your spouse is responsible for paying. This means that you are still legally responsible for the debt, and the creditor has the right to pursue you for payment if your spouse fails to fulfill his or her obligations. It is always best to pay off as many debts as possible prior to divorcing, but an attorney can work to see that you do not receive an unfair share of joint debts.