Who Gets the Debt in a Divorce?

Who Gets the Debt in a Divorce?

One common reason couples decide to divorce is because there are money problems and debt in the relationship. These problems may arise due to poor money management by one spouse, or an inability to obtain a good paying job. Economic problems generally lead to fighting between spouses which in turn spurs divorce proceedings. Yet, even though divorce can separate the two spouses it doesn’t necessarily end spousal debt. Debts incurred during the marriage can be assigned to one spouse, or both.

Who is Responsible For Spousal Debt in Utah?

Ideally, a couple divorcing in Utah will come to an agreement as to whom the joint debts will be assigned. Family law dictates that debts can be divided by agreement just like property. The court will step in when a couple has trouble coming to an agreement. In such a case, the court will try to divide joint debts equally between the two parties.

When it comes to separate debt the contracting party remains liable. According to Utah Code § 30-2-5, a spouse is not responsible for the separate debt of the other. This applies to all debt incurred before, during or after the marriage. There are a few important exceptions to this rule. Under subsection (1)(a) of the code debt acquired to pay family expenses may be divided between both parties. Furthermore, both parties may remain liable when one spouse incurs debt for the medical or dental expenses of a child.

Separating out debts can be a tedious task. It is a good idea to work with a family law lawyer who can help to properly characterize the debt.

What is the Effect on Creditors?

For separate debts the law states that creditors may not seek payment from the other party. This is supported by Utah Code 30-2-5(2). This section states that “the wages, earnings, property, rents, or other income of one spouse may not be reached by a creditor of the other spouse.”

An experienced lawyer will be quick to point out that the above section does not apply in situations involving joint debt. Although the court can order one party to pay an entire joint debt it doesn’t stop creditors from contacting either person. This is the case even if the creditor is aware of the court order. In this situation, it would be best to work with an experienced attorney who can file a motion for contempt against the non-paying spouse. The filing (or hearing) of this motion may persuade the other party to fulfill the payment obligation in the original court order.

Those needing help with a debt related issue should contact the Family Law Attorney Rex B Bushman. Don’t get stuck with an unfair share of marital debt. Call (801) 652-9413 for advice on how to resolve separate or joint debt matters.