Is Debt Considered Marital Liability in Georgia?
One factor that determines how debt is shared during a divorce in Georgia is how the couple obtained it. Debt is considered marital if it was obtained while the spouses were married and separate if acquired by either spouse before marriage. Marital debt is subject to equitable distribution during divorce, just like it happens with marital property.
Debt incurred during marriage is considered marital property, regardless of whether one or both parties acquired it. For example, if you co-signed on a credit card but your spouse uses the card without making repayments, you likely will be considered liable for the outstanding debt. Skilled family law attorneys in Alpharetta explain what you need to know about debt and divorce.
Equitable Division of Marital Debts
Debt division is a property division subset that follows the equitable distribution principle. The principle implies that marital property and debt aren’t shared 50/50 but equitably and fairly upon divorce. If you and your spouse disagree on how to divide your marital debt during your divorce, the court will consider the following factors in deciding how to divide the debt:
- The spouse that incurred the debt
- When either spouse incurred the debt
- Each spouse’s contribution to the debt
- The reason for accruing the debt
- The spouse with a significantly higher income
- How each party conducted themselves during the marriage?
- If alimony will be appropriate for the spouse with less income
The court may decide to allocate more debt to one spouse depending on the reasons it was acquired. For example, if one party acquired debt for non-marital activities or purposes, they may be liable for a bigger portion of the debt. Working with experienced divorce lawyers in Alpharetta can help protect your assets while ensuring fair debt distribution.
Division of Secured Debts
Secured debts like mortgages may be treated differently from unsecured debts like credit cards. If one spouse keeps the house or car, the other spouse won’t be obligated to contribute toward those payments. However, it would be necessary to refinance the debt to put the account solely in the name of the spouse who remains with the collateral.
That spouse will be responsible for that debt. In some cases, courts in Georgia may allow divorce couples to eliminate marital debt as part of the equitable distribution of assets. For example, the parties may be required to sell off extra assets to cover their overall liabilities to have a fresh start after the divorce. Consult Alpharetta debt division attorneys on how to go about this option.
What Effect Does Marital Debt Division Have on Creditors?
Creditors can still come after you if your spouse defaults on marital debt assigned to them by the court. That’s because contract law supersedes divorce law in Georgia regarding marital debts. However, that only applies to accounts that bear both your names.
If the court assigns 60% of your co-jointly signed credit card debt to your spouse, the creditor can garnish your wages or sue you to try to collect the debt if your spouse fails to pay. The only exception is if the divorce decree “indemnifies” you from the obligations.
In that case, you can file a petition against your spouse in the divorce court to reimburse you any money you lost for debts they were supposed to pay. Experienced and skilled legal representation for marriage dissolution in Alpharetta can evaluate your case and guide you on protecting your assets.
Assuming Debt After a Divorce
Many couples focus on who gets a more significant share of marital property, but how debts are divided is equally crucial. Once the liabilities are divided between you and your spouse, you must take steps to actually assume the obligation. The specific method applicable in transferring debt between you and your spouse depends on the type of debt in question.
For example, a credit card company may only need to remove your name from the account, or your spouse may have to open a new card and roll over the debt to the new account. In the case of a mortgage, the spouse retaining the home has to refinance it to remove the other party’s name from the account.
How is the Decree Enforced?
You are liable to pay for every debt that has your name on it even if your divorce decree says otherwise. Divorce decrees do not bind creditors, so they can still come after you for a debt you jointly owe, even if the court assigned it to your spouse during the divorce.
If you’re concerned that your spouse may default on the debt, you can request the court to include a “hold harmless” clause in the divorce decree. Alternatively, you can enforce the terms of the divorce decree by asking the court to hold your ex-spouse in contempt if they default on a debt as ordered by the court if the clause is non-existent.
An Experienced Divorce Attorney Helping You Deal with Marital Debt
Division of marital debt can be tricky, especially if one spouse is responsible for the more significant portion of the debt. The law in Georgia requires that marital debt is divided equitably between the divorcing parties, with each spouse being responsible for a fair share of the debt. Working with skilled family law attorneys in Alpharetta can reduce the chances of inequitable debt division.
Hetch Family Law has a team of skilled divorce attorneys who can help you through your divorce issues. We know how stressful the process can be, and we can provide the legal support and representation you need during this trying time. Call us at (470) 291-5342 to schedule a case strategy session with Attorney Hecht today!
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