Divorce and Debt: What You Owe and What You Don't


Cherie Kerr - Divorce and debtBy the time Cherie Kerr and her ex-husband finally went their separate ways, her ex had run up $89,000 in debt during the divorce proceedings alone. She knew that if she didn't take action fast, that debt would scar her financial life forever.

In a way, Kerr knew the marriage was over before it began. Her husband, a home builder, almost immediately asked to borrow $100,000 on Kerr's house to finance his business "and I stupidly agreed," says Kerr, who owns a publicity firm in Santa Ana, Calif.

He said he'd pay her back in six months, but after five years, when the marriage was crumbling -- in large part because Kerr says she didn't trust her husband -- he still hadn't paid her back. He finally managed to do so a few months before the divorce papers were to be signed, and Kerr breathed a huge sigh of relief. Yet, a few weeks later, Kerr learned that her husband had taken out a $150,000 line of credit in both of names and had already spent $89,000 of it."What are you mad about?" her husband asked when confronted with this new development. "There's plenty of money left for you, too."

"I'm not living on borrowed money," protested Kerr, who knew she'd be responsible for paying back that debt. So she spoke with her attorney, who then spoke with her soon-to-be ex-husband.

Luckily for Kerr, her husband managed to pay back the money from the line of credit before they hashed everything out in court.

Kerr barely escaped a financial disaster. Before a divorce is final, the debt your partner incurs during that period is still yours.

"A spouse is and can be held liable in a divorce for the other spouse's debts -- and it doesn't necessarily matter whose name the debt is in," says Richard P. Terbrusch, a matrimonial attorney (nobody seems to call themselves "divorce attorneys" any more) in Danbury, Conn.

So if you've just ended a marriage or are considering calling it quits and wondering what's going to happen to that debt your spouse racked up, it might be helpful to understand a few things.

There Are Two Types of Debt

When it comes to divorce and debt, there are two forms of debt that courts primarily tend to look at: living expenses and community property.

Living expenses are, as you'd imagine, the money you pay for the mortgage or rent, groceries, utilities, your cable or cell phone, and other, similar expenses. Community property is pretty much everything else.

So if you and your spouse owe, say, $3,000 on a credit card that you've been using to pay for groceries, gas and cable, that debt is considered living expense debt. But if the debt you've racked up on your credit card is for gym equipment, a new TV, a freezer-on-top refrigerator -- well, that's community property debt.

Determining the debt you owe begins to get confusing if you have both living expenses and community property expenses on the same credit card. And it gets more complicated if one person had the credit card before the marriage and racked up say, $5,000 in debt on it prior to the marriage, and then during the marriage, both parties added even more debt to it.

At that point, "what debts are separate and what aren't, and what debts you can justifiably say aren't yours is almost impossible," says Bob Nachshin, a matrimonial attorney in Century City, Calif., whose clients have included Will Smith, Rod Stewart, John Ritter and Barry Bonds.

Where You Live Determines Whether You Share That Debt

In community property states, the courts see the debt that's accrued over the course of the marriage as the responsibility of both parties. So if you and your spouse bought a boat for $25,000, and you still owe $20,000 on it, then both parties split that $20,000 debt down the middle.

But what if the husband secretly bought that boat with a credit card that was in his name only and the wife, whose name wasn't on the card, had no clue about its existence? In a community property state, she still owes $10,000.

Likewise, says Terbrusch, "if the wife runs up a credit card in her name alone during the marriage, a portion or all of the debt could be assigned to the husband during the divorce."

Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

If you're living in another state, then how you split your debt is likely done through what's called equitable distribution, in which attorneys and a judge determine who owes what. In other words, if your spouse racked up a lot of credit card debt in secret, you're more likely to come out of your marriage not owing any of that money. But while that makes it sound like community property states belong in the Stone Age, that's not necessarily so.

After all, by splitting everything down the middle, courts are trying to promote the idea that a marriage is an equal partnership, and that if a mom quits her job to stay home and raise the kids while the dad brings home the paychecks, she's entitled to half the assets because she was contributing half her time and energy into keeping the family going. In this case, equitable distribution works to the benefit of both partners.

And while it's different in every state, courts are generally going to take many factors into consideration, from how long the marriage lasted and each person's income during the union to whether either spouse had been wed before, which is relevant if your soon-to-be-ex brought debt to the marriage that was a result of his or her former spouse's out-of-control spending habits.

Lesson to Be Learned

Kerr's experience left her wiser. Her advice for couples in bad marriages: "The minute you split up, or even before you split up, make sure everything is paid for. I know that if I ever got married again, I'd want everything in my name and maybe one joint account, which I'd make sure was buttoned up so we couldn't get into too much trouble. I never want to be that vulnerable again."

If you're saddled with an ex-spouse's debt that's ruining your life, and you don't feel you have any other recourse, there's always the option of bankruptcy. It may be an unappealing option, but since bankruptcy discharges most of what you owe, it does make it possible to divorce a spouse's debt.

And most experts will tell you that if you're going to have to declare bankruptcy, it's better to do it jointly, before you end the marriage -- that's simply because if you're trying to make a clean break, its hard to do so if you're burdened by a large amount of debt that you accumulated during your marriage. While we're not recommending bankruptcy as your first option, if it's clear that it's going to be in the cards, you'd be wise to make it part of the divorce experience, rather than have to deal with it several months later.

And keep in mind that if your partner declares bankruptcy and you don't, you'll be on the hook for all the debt you two accumulated during the marriage. Credit card companies don't care that your ex was a jerk, and that ethically you shouldn't have to pay the $40,000 he or she spent during the years you were married. If your name was on that credit card, the company can come after you for those funds. If your departing spouse declares bankruptcy, that alone may force your hand to declare it as well.

But not all news is bad news.

"Courts are fair," says Naschin, the attorney who has handled a lot of celebrity divorces. Overall, he says, when it comes to deciding whose debt is whose, "most courts aren't jaded and want to do the right thing. And most courts don't want to be reversed in an appeal."

Geoff Williams is a frequent contributor to WalletPop. He is also the co-author of the book Living Well with Bad Credit.

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum

33 Comments

Filter by:
Melisa Shawn

Viewers of this testimony should please stop by and rejoice with me.
My name is Melisa Shawn from Usa, i never believe in love spell or magic powers because i believed all of them was scammers and fake until when i experienced heart brake with the father of my kids and i came across Prophet Ibu of divinesolutioncenter@hotmail.com or divinesolutioncenter01@gmail.com a great online spell caster who just helped me recently to rescue my lost relationship with my Husband who broke up with me for good three and a half years. When i contacted him, i told him everything that happened between me and my Husband and without demanding anything from me, he decided to perform a spell cast and after 24 hours surprisingly my Husband called me on my mobile and started speaking with me in a good manner and as i am sharing this testimony now we are back again into our relationship and i'm the happiest woman on earth for Prophet Ibu had done a great and wonderful thing in my life. Come and rejoice with me and if you wish to contact Prophet Ibu for any help i will drop his email ids(divinesolutioncenter@hotmail.com and divinesolutioncenter01@gmail.com) or you contact him through his personal website on
http://divinesolutioncenter.webs.com/
He is the best of our time...

Tuesday at 6:12 PM Report abuse rate up rate down Reply
Melisa Shawn

Type your c Viewers of this testimony should please stop by and rejoice with me.
My name is Melisa Shawn from Usa, i never believe in love spell or magic powers because i believed all of them was scammers and fake until when i experienced heart brake with the father of my kids and i came across Prophet Ibu of divinesolutioncenter@hotmail.com or divinesolutioncenter01@gmail.com a great online spell caster who just helped me recently to rescue my lost relationship with my Husband who broke up with me for good three and a half years. When i contacted him, i told him everything that happened between me and my Husband and without demanding anything from me, he decided to perform a spell cast and after 24 hours surprisingly my Husband called me on my mobile and started speaking with me in a good manner and as i am sharing this testimony now we are back again into our relationship and i'm the happiest woman on earth for Prophet Ibu had done a great and wonderful thing in my life. Come and rejoice with me and if you wish to contact Prophet Ibu for any help i will drop his email ids(divinesolutioncenter@hotmail.com and divinesolutioncenter01@gmail.com) or you contact him through his personal website on
http://divinesolutioncenter.webs.com/
He is the best of our time... omment here

Tuesday at 6:11 PM Report abuse rate up rate down Reply
Frank Silver

HELLO i have read testimonies about this great spell caster called Dr. Ekpiku how he helped people to bring their lover back. so i decide to give him a try, i am here today to give my own testimony on how this great man brought my ex back within 48 hours for just to contact him. this girl has broke up with me over 6 weeks but she came back just within 48 hours that Dr Ekpiku said he will make her come back to me. just contact this man and he will bring your ex back here is his email address mail. Ekpikuspelltemple@live.com

March 07 2014 at 6:30 PM Report abuse rate up rate down Reply
Lillian Jose

THANKS TO GREAT DR ASIJE FOR SOLVING MY PROBLEMS
i was married to my husband for 5 years we were living happily together for this years and not until he traveled to Italy for a business trip where he met this girl and since then he hate me and the kids and love her only. so when my husband came back from the trip he said he does not want to see me and my kids again so he drove us out of the house and he was now going to Italy to see that other woman. so i and my kids were now so frustrated and i was just staying with my mum and i was not be treating good because my mother got married to another man after my father death so the man she got married to was not treating her well, i and my kids where so confuse and i was searching for a way to get my husband back home because i love and cherish him so much so one day as i was browsing on my computer i saw a testimony about this spell caster DR ASIJE testimonies shared on the internet by a lady and it impress me so much i also think of give it a try. At first i was scared but when i think of what me and my kids are passing through so i contact him and he told me to stay calm for just 24 hours that my husband shall come back to me and to my best surprise i received a call from my husband on the second day asking after the kids and i called Dr ASIJE and he said your problems are solved my child. so this was how i get my family back after a long stress of brake up by an evil lady so with all this help from DR ASIJE, i want you all on this forum to join me to say a huge thanks to DR ASIJE and i will also advice for any one in such or similar problems or any kind of problems should also contact him his email is drasijesolutionhome@gmail.com he is the solution to all your problems and predicaments in life. once again his email address is drasijesolutionhome@gmail.com or contact him through his private website at
http://drasijesolutionhome.webs.com
he is the best in casting of spell of the following:

1) If you want your ex back.
(2) if you always have bad dreams.
(3) You want to be promoted in your office.
(4) You want women/men to run after you.
(5) If you want a child.
(6) You want to be rich.
(7) You want to tie your husband/wife to be
yours forever.
(8) If you need financial assistance.
(9) How you been scammed and you want to recover you lost money.
(10)if you want to stop your divorce.
(11)if you want to divorce your husband.
(12)if you want your wishes to be granted.
(13) Pregnancy spell to conceive baby
(14)Guarantee you win the troubling court cases & divorce no matter how what stage
(15)Stop your marriage or relationship from breaking apart.
once again the email address is drasijesolutionhome@gmail.com contact him immediately or contact through his website at http://drasijesolutionhome.webs.com

February 11 2014 at 8:16 AM Report abuse rate up rate down Reply
Sophia Cranor

Hello to you all on this site it brings me so much joy and happiness today so i decided to share my happiness and testimony to you all,my name is Sophia am from New York am 52 years old i married to Mr George Cranor he is north America we have 3 grown up children and grandchildren,2 years ago my husband said he needs a divorce that he is no longer interested in the marriage that was how my husband left me with the children and moved to another state with his new girlfriend, i travel to with a friend to visit his husband for Christmas celebration getting there i came across a powerful spell caster who help people to fix their broken marriage and relationship and get ex lover back,the spell caster is called DOCTOR OBALLA he is very powerful he cast a spell for me and he said to me that i should return to my country my husband is waiting for me at home,when i came back to New York i meant my husband with the children waiting for my arrival my husband apologize to me and we are happily married now am very happy i will never forget this powerful spell cater,if you also need his help contact him now with his email: oballaspelltemple@hotmail.com

January 27 2014 at 9:27 AM Report abuse rate up rate down Reply
Edwin Wallace

I NEVER BELIEVED IN LOVE SPELLS UNTIL I MET THIS WORLD'S TOP SPELL CASTER. HE IS REALLY POWERFUL AND COULD HELP CAST SPELLS TO BRING BACK ONE'S GONE,LOST,MISBEHAVING LOVER AND MAGIC MONEY SPELL OR SPELL FOR A GOOD JOB.I'M NOW HAPPY & A LIVING TESTIMONY COS THE WOMAN I HAD WANTED TO MARRY LEFT ME 2 WEEKS BEFORE OUR WEDDING AND MY LIFE WAS UPSIDE DOWN COS OUR RELATIONSHIP HAS BEEN ON FOR 2YEARS... I REALLY LOVED HER, BUT HER MOTHER WAS AGAINST US AND SHE HAD NO GOOD PAYING JOB. SO WHEN I MET THIS SPELL CASTER, I TOLD HIM WHAT HAPPENED AND EXPLAINED THE SITUATION OF THINGS TO HIM..AT FIRST I WAS UNDECIDED,SKEPTICAL AND DOUBTFUL, BUT I JUST GAVE IT A TRY. AND IN 7 DAYS WHEN I RETURNED TO USA, MY GIRLFRIEND(NOW WIFE) CALLED ME BY HERSELF AND CAME TO ME APOLOGIZING THAT EVERYTHING HAD BEEN SETTLED WITH HIS MOM AND FAMILY AND SHE GOT A NEW JOB INTERVIEW SO WE SHOULD GET MARRIED..I DIDN'T BELIEVE IT COS THE SPELL CASTER ONLY ASKED FOR MY NAME AND MY GIRLFRIENDS NAME AND ALL I WANTED HIM TO DO... WELL WE ARE HAPPILY MARRIED NOW AND WE ARE EXPECTING OUR LITTLE KID,AND MY WIFE ALSO GOT THE NEW JOB AND OUR LIVES BECAME MUCH BETTER. IN CASE ANYONE NEEDS THE SPELL CASTER FOR SOME HELP, HIS EMAIL ADDRESS IS;supremetemple@hotmail.com......HOPE HE HELPS YOU OUT OUR OPPORTUNITY ... CONTACT THIS GREAT SPELL CASTER VIA EMAIL:supremetemple@hotmail.com

January 02 2014 at 1:28 AM Report abuse rate up rate down Reply
Mike Olivia

This is my testimony about the good work of a man who helped me..My name is Olivia mike, and I base in London.My life
is back!!! After 8 years of marriage, my husband left me and left me with our three kids. I felt like my life was about to
end, and was falling apart. Thanks to a spell caster called papa Justus who i met online. On one faithful day, as I was browsing through the internet, I was searching for a good spell caster that can solve my problems. I came across series of testimonies about this particular spell caster. Some people testified that he brought their Ex lover back, some testified that he restores womb, some testified that he can cast a spell to stop divorce and so on. There was one particular testimony I saw, it was about a woman called grace,she testified about how papa Justus brought back her Ex lover in less than 72 hours and at the end of her testimony she drop papa Justus e-mail address. After reading all these,I decided to give papa a try. I
contacted him via email and explained my problem to him. In just 3 days, my husband came back to me. We solved our issues,
and we are even happier than before. papa Justus is really a talented and gifted man and i will not to stop publishing him
because he is a wonderful man...If you have a problem and you are looking for a real and genuine spell caster to solve that
problem for you. Try the great papa Justus today, he might be the answer to your problem. Here's his contact:
drabeljustus@gmail.com Thank you great Justus. Contact him for the following:

(1)If you want your ex back.
(2) if you always have bad dreams.
(3)You want to be promoted in your office.
(4)You want women/men to run after you.
(5)If you want a child.
(6)[You want to be rich.
(7)You want to tie your husband/wife to be yours forever.
(8)If you need financial assistance.
(9)Herbal care
10)Help bringing people out of prison
(11)Marriage Spells
(12)Miracle Spells
(13)Beauty Spells
(14)PROPHECY CHARM
(15)Attraction Spells
(16)Evil Eye Spells
(17)Kissing Spell
(18)Remove Sickness Spells
(19)ELECTION WINNING SPELLS
(20)SUCCESS IN EXAMS SPELLS
Contact him today on:
drabeljustus@gmail.com,
+2347033354868.

January 01 2014 at 11:30 PM Report abuse rate up rate down Reply
Joy Williams

My name is williams and I base in uk...“My life is back!!! After 1 years of
Broken marriage, my wife left me with two kids . I felt like my life was
about to end i almost committed suicide, i was emotionally down for a very
long time. Thanks to a spell caster called High Priest OLORUN which i met
online. On one faithful day, as I was browsing through the internet,I came
across allot of testimonies about this particular spell caster. Some people
testified that he brought their Ex lover back, some testified that he
restores womb,cure cancer,and other sickness, some testified that he can
cast a spell to stop divorce and so on. i also come across one particular
testimony,it was about a woman called Sonia,she testified about how he
brought back her Ex lover in less than 7 days, and at the end of her
testimony she dropped High Priest OLORUN 's e-mail address. After reading
all these,I decided to give it a try. I contacted him via email and
explained my problem to him. In just 3 days, my husband came back to me. We
solved our issues, and we are even happier than before. High Priest OLORUN
is really a gifted man and i will not stop publishing him because he is a
wonderful man... If you have a problem and you are looking for a real and
genuine spell caster to solve all your problems for you. Try High Priest
OLORUN anytime, he might be the answer to your problems. Here's his
contact:{OLORUNLOVESPELLHOME@gmail.com

December 26 2013 at 3:47 AM Report abuse rate up rate down Reply
Nicole Betty

I never believed in love spells or magic until I met this spell caster once when i went to see my friend in AFRICA this year on a business summit. I meant a man who's name is Dr OKAYA he is really powerful and could help cast spells to bring back one's gone, lost, misbehaving lover and magic money spell or spell for a good job or luck spell .I'm now happy & a living testimony cos the man i had wanted to marry left me 7 weeks before our wedding and my life was upside down cos our relationship has been on for 4years. I really loved him. So when i met this spell caster, i told him what happened and explained the situation of things to him. At first i was undecided,skeptical and doubtful, but i just gave it a try. And in 2 days when i returned to Canada, my boyfriend (now husband) called me by himself and came to me apologizing that everything had been settled. Well we are happily married now and we are expecting our little kid, and my husband also got the new job and our lives became much better. His email is okayaspellhelp@gmail.com

December 23 2013 at 7:17 AM Report abuse rate up rate down Reply
Orlando Wilson

Greetings to every body that is reading this testimony
Me and my boyfriend were seriously in love for six years and we were planning to get married but one day he came to my house and told me he was no longer interested in our relationship simply because he was dating another rich lady who promise to buy him a car and to sponsor their wedding. And i suffer heartbreak for seven months and i was not tired of loving him.so i take a bold step by contacting a spell caster who help me bring my ex boyfriend back. he is powerful and great his contact is Kumalovespell@gmail.com you can also contact him for help

November 28 2013 at 6:13 PM Report abuse rate up rate down Reply