Part of ending your ties with your spouse is to take care of the debt incurred during the divorce. Colorado is an equitable distribution state and the court will assign debt responsibility based on the person who incurred the debt. But, regardless of how the court divides up the debt, you still have to pay the debts in your name. Debt division can create an issue when a spouse has been ordered to pay a debt that is not in their name. And while you can take legal action against a spouse who does not make payments on a debt, this can take time. And by the time you get to court, you may already have a ruined credit. 

Marital and Separate Debt

In divorce proceedings, debts should be categorized as either marital or separate. Debts incurred before the marriage or after separation are classified as separate and should be paid by the spouse who amassed them. Meanwhile, financial obligations incurred during the marriage are classified as marital debt and no matter which spouse accrued them, both spouses have equal responsibility to pay off the debt. Centennial divorce attorneys can help you understand which of your debts are separate and marital. In divorce cases, some debts that can be divided include business debts, credit card debts, car loans, medical debt, mortgages, payday loans, student loans, utility bills, and personal loans. Debts can be divided 50/50 or you and your spouse can establish another way to divide your debts. If you cannot agree to a debt division, a judge will divide the debt equitably. 

Impact of Marital Debt on Your Divorce

Debt can become a tool for negotiation during a divorce. You and your spouse may negotiate which assets you leave the marriage with. Also, you can use debt as a bargaining chip. For instance, if your spouse wants spousal support after your divorce, you agree to take on more of the marital debt instead of paying for the spousal support. 

Moreover, marital debt can also affect who gets certain pieces of marital property. For instance, if you have secured debts backed by collateral like a car loan or mortgage, the spouse who gets the asset usually takes responsibility for paying the debt that comes along with it. 

Having significant debt loads can also make it hard to move on after marriage. Should you rent an apartment, your potential landlord will have to run a credit check first. If you have poor credit, you might have trouble setting up a new household. Make sure to speak with your attorney about any concerns you may have about your marital debts to know your options.