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How is the couple's debt divided in a divorce?

There are two sides to every coin, as the saying goes. In the legal system, this concept can come into play for Salt Lake City residents, as the same legal principle can be applied for good or for bad, depending on what side of the case a person happens to be on.

Recently, for example, this blog has discussed the process of property division during a divorce. Marital property owned by the couple is typically divided in an equitable manner in the divorce. While an equitable division of assets can work to the benefit of a spouse, the same principle is used to divide debt that is maintained by the couple in the marriage.

Accordingly, disputes can arise between the individuals when one person accumulated significant debt during the marriage that he or she now seeks to divide with the other person. If these issues cannot be resolved in a divorce agreement, the court will need to resolve the dispute.

Just as a person may seek to keep property he or she owned separately before the divorce, the debt that belongs solely to one person before the divorce is typically considered to be that individual's burden to pay following the divorce. Utah law provides that neither spouse is personally liable for the separate debts of the other that were contracted or incurred before the marriage. Likewise, separate debt incurred during the marriage might not be divided, depending on the circumstances.

Of course, there can be serious disputes between the parties as to whether debt was truly separate or whether it was incurred by both spouses. For instance, if the proceeds of a loan benefitted both spouses, it might be considered marital debt incurred by the couple. Ultimately, these are fact-specific questions that will turn on the circumstances of each individual case.

Source: Utah State Legislature, "Separate debts," accessed on April 30, 2016

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