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What debts can people exclude from division in a divorce?

On Behalf of | Jan 28, 2025 | Divorce

Divorce proceedings typically require that spouses resolve financial matters. In some cases, spouses may have already agreed to specific terms by negotiating a prenuptial or postnuptial agreement. In those scenarios, spouses have a straightforward property division process ahead of them. They have already agreed to specific rules that can take much of the conflict out of the asset division process.

Unfortunately, the vast majority of people contemplating divorce do not have a marital contract to govern the process. Instead, the spouses must settle their disagreements by negotiating arrangements with one another or asking a judge to apply the property division statute to their marital estate. In addition to splitting up their assets, divorcing spouses also have to address their marital debts.

It may be possible to exclude certain debts from the marital estate and ensure they remain the responsibility of one spouse. What debts might be the separate responsibility of one spouse alone?

Debts predating the marriage

Financial obligations that either spouse took on prior to getting married typically remain their separate responsibility after divorce. For example, one spouse’s student loans from before marriage are still their separate responsibility after the divorce. Credit card balances and other debts that originated before the divorce or after the spouses separated may not be part of the property division process.

Debts created through dissipation

Spouses should not intentionally damage the marital estate. If one spouse can prove that the other engaged in unusual amounts of spending to manipulate the property division process, they can potentially ask the courts to exclude those debts from property division proceedings.

The same might be true of debts that one spouse took on to conduct an extramarital affair. Credit card balances accrued paying for vacations or hotel rooms while cheating may not factor into the overall property division process.

Debts incurred in secret for personal reasons

Sometimes, one spouse has to hide their economic activity from the other because of domestic violence or financial abuse. They start a secret credit card so that they can buy groceries for their children. In such cases, even hidden debts could be part of the marital estate because the goal was to support the family.

However, cases involving financial infidelity or intentional misrepresentation of financial conduct could result in the courts excluding certain debts. If one spouse lies to the other about their spending habits and hides their debt during the marriage, it may be possible to prevent the inclusion of those financial obligations in the marital estate.

Conducting a thorough financial review with a skilled legal team is often crucial for a fair divorce outcome when there is a complex marital estate at issue. People who identify inappropriate debts on financial disclosure documents can potentially hold their spouses accountable for financial misconduct during a divorce.