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How to Divide Debt in a Missouri Divorce

In most divorces, the division of marital assets gets all the attention. Few couples want to think about their debts when they can think about the equity in their home or the value of an IRA. But these debts don’t go away, so a divorcing couple will need to divide those, too.

At Call & Gentry Law Group, LLC, we work closely with clients to make sure they exit their marriages in strong financial shape. Call us to schedule a consultation to talk about your divorce and marital debts.

Identify Which Debts Need to Be Divided

Most spouses have some debt that predates the trip down the aisle. Student loans to pay for college are a common example. The spouse who took out this debt while single should have responsibility for paying the debt after divorce.

The debt you need to divide are debts which either spouse took out while married. This debt is presumed to be marital.

Divide Marital Debts Between Yourselves

Divorcing couples have considerable leeway to divide property and debts in a way that works for them. Consider the following possibilities:

  • The spouse who gets the house can also take on the mortgage.
  • The spouse who gets a car should take on the car loan.
  • Any debts incurred for children can be split evenly between the spouses.

These are just some options. The key point is you can divide the debts as you see fit.

Fight it Out in Court

What happens if you can’t reach an agreement? You probably have no choice but to go to court, where a judge will decide how to divide marital assets and debts equitably. Judges look at many factors as spelled out in Section 452.330, as well as any other factor that is relevant. In our experience, many judges will consider the following:

  • Which spouse took on the debt and why. A spouse who took out a student loan while married might have to pay it all off. That’s only fair, since the spouse is getting the benefit of the education by earning a higher income going forward. Similarly, a debt taken for a small business might get assigned to the spouse who leaves with the business.
  • Each spouse’s separate property. A spouse with more assets after divorce might have to pay a greater share of marital debt.
  • The earning potential of each spouse. A judge might award more marital debt to the higher-earning spouse out of fairness.

Our Jefferson City divorce lawyer can provide more details about how a judge will analyze marital debt in the divorce context.

Protect Yourself

Even if a judge assigns debt to your ex, a creditor might sue you in the event of default. Let’s say you had a joint credit card with your ex. Your judge assigned all debt to your ex, since he ran up the credit card bill. You might just brush your hands and think, “Good, that’s taken care of!”

However, because the card was joint, you are still legally liable for the debt—regardless of which spouse gets the debt in a divorce decree. You should keep this in mind when reviewing marital debts.

Please call our law firm today to schedule a consultation. The sooner you begin thinking about debt division, the better your odds of leaving a marriage in sound financial condition.