Friday, May 10, 2013

Am I liable for my spouse's debts after a divorce?

Florida Makes a Distinction Between Separate and Marital Property

Let's say your spouse loved to gamble before he met you and racked up several thousand dollars worth of credit card debt. You've both been dutifully paying off the debt while you were married, but now you've decided to get a divorce and the debt is still rather hefty. Are you liable for your spouse's gambling debts?

No, not in most cases, as the state of Florida makes a distinction between assets and liabilities accrued before marriage and those that came during the marriage.

Equitable Distribution Guidelines

First of all, each state has different laws that apply to these types of scenarios. In Florida, this scenario would fall under “equitable distribution” guidelines which dictate that marital assets and liabilities are to be divided equitably. In some states, this does not necessarily mean that these assets and liabilities will be divided equally, just fairly, and this is true for Florida as well.

Florida law makes a distinction between separate or pre-marital property and marital property.

Separate property

Separate or pre-marital property, which would not be subject to being division during a divorce, could include assets:

  • owned before marriage 
  • those a couple has defined as separate property in a legally binding document such as a prenuptial agreement
  • income earned from separate property
  • items obtained with separate property

Marital Property

Generally speaking, marital property includes property acquired during the marriage, regardless of whether both spouses are on the title. The same rule typically applies for debts. Both spouses are usually jointly responsible for a debt that is acquired during the marriage even if it is only in one spouse's name. An exception would be if the court determines that your spouse spent money recklessly or wastefully.

Each spouse generally works with an attorney that will advocate on each spouse's behalf to come up with an agreement on how marital property (assets) and liabilities (debts) will be divided. A judge or mediator could decide to divide property and debts unequally based on factors such as each spouse's income and the length of the marriage, among other factors.

We recommend that you consult with an attorney who can determine whether you are liable for any of your spouse's debt, whether based on the use of a credit card or a different set of facts. Your attorney can work with you to figure out how to best advocate on your behalf during a divorce, where equitable distribution will function to divide the assets and liabilities at issue in your case.

Photo credit: 401(K)2013

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