DEBT Division

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Denver Debt Division Attorneys

One of the most common issues in a divorce case is the division of marital debt. Courts are called on to divide up the debts in an equitable manner between the divorcing parties. All marital debt must be allocated in the divorce case.

Many factors go into a court’s evaluation of marital debt, including:

  • Contribution of the spouses
  • When the debt was incurred
  • Who incurred the debt
  • The reason the debt was incurred

Dividing Debt

During any marriage, spouses can incur debt in everyday activities, or for special things like the marital home, houses, cars, and vacations. Sometimes, the family incurs a lot of debt. All of these debts have to be divided between the parties at the end of the divorce case. Sometimes, a court’s logic in dividing these debts can be confusing and frustrating.

The legislature in Colorado has required courts to determine the value of marital debt and divide it “equitably.” Equitable division means the court considers all relevant factors and is supposed to divide things “fairly.” There is no requirement in Colorado that marital debt be divided 50/50.

In practical terms, courts and family law lawyers generally start from the position that all marital debt should be divided 50/50. From that starting point, argument can be made that a spouse should be more responsible for a particular debt because they incurred it, or maybe incurred it without the other spouse’s knowledge, or for a purchase to which they didn’t agree. Additionally, a court can be convinced to allocate debt disproportionately when a party simply can’t afford to service it.

At Modern Family Law, we are a top-tier Denver divorce firm. Call us at (303) 394-3030 to see how we can help you in your debt division matter.

What Is & Isn’t Marital Debt?

What constitutes marital debt is often a confusing question. In general, marital debt is debt that was acquired during the duration of the marriage. Separate debt is debt that a spouse had prior to marriage. Separate debt means the party who walked into the marriage with the debt is responsible for it after the divorce.

It does not go into a 50/50 division. The separate nature of debt can be clouded by payment on the debt from marital funds. This is especially true where the debt is associated with an asset. Top divorce lawyers in Colorado often argue what’s known as “tracing” in these clouded debt situations.

Protect Yourself from Credit Card Debt

Often times, clients are very distraught by the fact that credit cards in the name of the other spouse are still marital debt. This can be the case even if the client had no idea their spouse was using the credit card. In fact, the other spouse could be using the credit card to pay for the expenses related to their affair and it’s still marital.

Simply because a debt may be in the name of one spouse does not necessarily mean it is the responsibility of that spouse. Very often, divorce lawyers have to look deeper into the nature of the debt to determine how it should equitably be divided.

The Timing of the Debt Matters

Many times, we see a spouse run up the debt on a credit card right before, or just after, filing for divorce. There may be legitimate reasons associated with incurring this new debt. For example, a spouse might need their own apartment and need to furnish it quickly. Also, a spouse may need to hire a good divorce attorney.

These are generally considered legitimate reasons to incur debt. Occasionally, this debt is incurred in retaliation for the failed marriage. A spouse may decide to run up the debt with a first class ticket to Aruba for a nice two-week vacation. Or worse, may bring their new boyfriend or girlfriend along on your dime.

Timing here may be important for court in determining an equitable division of these debts. But even if the judge believes the acquisition of the debt was retaliation for the divorce, they may, or may not, allocate these retaliatory debts unequally. It’s the sole discretion of the judge how to divide the debt incurred by the trip to Aruba.

Schedule your complimentary case evaluation with our dedicated divorce attorneys in Denver, CO today.