How is Marital Debt Divided in a Georgia Divorce?

When couples divorce distribution of property issues are usually an important consideration. However, marital debt can be just as important. Georgia is an equitable distribution state. This means one spouse runs the risk of shouldering more than half the marital debt assigned during a divorce.

Although equitable means fair, it should not be confused with equal. Parties may not feel they have been treated fairly by the courts. Courts in equitable distribution states are not obligated to split marital property or debts 50/50.

Judges can take several factors into consideration, including how much the parties earn and their ability to pay. Debts may be distributed 60/40, or even 80/20.

Dividing Maritial Debt in a Georgia Divorce

How is Marital Debt Divided in a Georgia Divorce

Factors Judges Will Consider When Apportioning Marital Debt in Georgia

In equitable distribution states like Georgia, judges can consider a range of factors when dividing both assets and debts. They include:

  • How much the respective spouses earn
  • The extent the spouses contributed to the debt like running up credit cards

In Georgia, courts may either assign various accounts to each spouse to pay off the debts or both spouses may be obliged to pay off a certain percentage of each account in debt.

The courts also permit the parties to a divorce to eliminate debt as part of the equitable distribution of assets. If one party has sufficient assets to cover the overall debt, he or she may be able to sell them to pay off the debt so as both parties have a fresh start after the divorce.

Marital debt may be treated differently in the case of secured debts like mortgages or auto loans. While unsecured debts like credit cards will be dealt with by equitable distribution, usually, if one spouse is retaining a home or an automobile, a judge won’t order the other spouse to make contributions to those payments. Refinancing is usually required to place the account solely in the name of the spouse who retains these assets and that spouse is usually responsible for paying the loan.

Contractual Debt May Override a Marital Debt Agreement

There are two types of marital debt considered during a divorce. Joint debt is debt in the name of both spouses and individual debt that’s marital in nature.  The holder of the debt is not a party to the divorce.  In other words, a financial institution or another entity is not bound by any arrangement between two divorcing spouses related to who is responsible for paying debts.  Even when a divorce decree mandates that one spouse is responsible for a debt, the other spouse may still be held accountable for repayment by a joint creditor if the spouse who is responsible defaults.

If you need help on a divorce matter please call our Georgia family attorneys at (404) 913-1529.