HomeBusinessHow is my debt handled when I am divorced and remarried?

How is my debt handled when I am divorced and remarried?

A divorced couple discusses debt obligations.

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Divorce and remarriage can raise questions about how debts are divided and managed between former and new partners. In most cases, debt acquired during a marriage is considered marriage debt and can be distributed during the divorce process, depending on the national laws. However, the debt that is brought into a remarriage usually remains the responsibility of the person who made it, unless otherwise agreed.

A financial adviser Can help you understand how debts can be influenced by divorce and marriage, and draw up a plan to restructure your finances.

Where you separate is an important consideration when studying how debts are influenced. This is because the process of splitting debts can vary considerably, depending on whether you live in a community state or a common law state.

In general, all debts considered during the marriage are considered joint debts, which means that both spouses are equally responsible for them. Even if only one spouse is signed for a loan or credit card, both can be liable for the debt.

For comparison, in Common Law States, debts are usually assigned to the person who made them. That is, if a partner borrowed money to buy a car, only that partner is responsible for paying off the loan. An exception occurs when both parties are co-signators of a credit scheme.

Here is a table that shows whether states use the community possession or common law systems:

Community Property States

Common Law States

Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin

Alabama, Alaska*, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri, Missouri , Montani, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, and and and Virginia and Wyoming

*Alaska enables couples to choose in a community possession if they agree

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In community property states, the law regards most debts acquired during marriage as shared responsibilities. This approach can simplify the division process, because debts are usually split into the middle.

However, it can also lead to complications if a spouse was considerably more responsible for building debts. This can be true, even if one partner accepted a debt without the knowledge of the other. In that situation, both can be held responsible for a debt made exclusively by one partner.

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