It’s common to have questions when you embark upon a divorce. How will child custody be handled? Will spousal support be ordered? Who will get the house? One thing you may not think of right away is debt—most everyone has it, including married couples, so what happens to it?
Debts are considered property
Property division is one of the primary issues that must be dealt with during a divorce. Most people think of property as a home, a car or countless other tangible things, but property includes liabilities as well as assets. Those debts are broadly broken down into two different categories; separate debts and marital debts.
Courts deal with debts in much the same way that they deal with assets. Just as one spouse can own a particular asset entirely for themselves, so too can they wholly own an individual debt. Often, this is a debt that was incurred prior to the marriage but not always. It is possible for one spouse to incur a debt, during the marriage, which is completely distinct from the other spouse’s debt. Regardless of when the debt was incurred, it will typically remain with the spouse who owns it after the divorce is final.
All debts that are not considered separate property—and this will be most of them—are owned by both spouses. Since Georgia is an equitable distribution state, these marital debts will be divided between the spouses in a manner deemed fair (equitable) by the court. This does not necessarily mean the division of debt will be equal. Fairness is the court’s priority.
A court will consider the totality of the marriage and the circumstances of each spouse to determine how marital debt should be divided. It takes the same approach with respect to marital assets. Only a holistic view of the marriage, the assets and the debt will provide insight into how all property will be divided in a particular divorce.