In a divorce action the courts are required to make many decisions, ranging from child custody to who gets the family dog. One common area of contention is who is responsible for family debts. Most couples in a divorce have some debts, debts on houses, cars, RC Willey, or credit cards. So who pays for them? What if the card is in the wife’s name only but the husband has been servicing the debt? What if the credit card is in the husband’s name only but was used to pay for groceries? What if the credit card is in both parties’ names but one party used rang up thousands of dollars in debt paying for an illicit love affair? These issues come up time and time again in divorce proceedings.
“In a divorce action, there is no fixed formula upon which to determine a division of debts. However, such allocation must be based upon adequate factual findings which ruling we will not disturb absent an abuse of discretion.” Rehn v. Rehn, 974 P.2d 306.
The courts are left with very broad discretion in determining how to divide marital debts. They will look at any relevant evidence in determining what the debt was incurred for and how to divide the payments. As a general rule purchases which were made for family purposes (groceries, utilities, clothing, family vacations, etc.) are put into the overall “pot” for division. Expenses which are from one party only are usually set aside to be that party’s debt alone.
Now what the court does with the debt or how they divide them is based on more factual determinations. The court will look at the incomes of the parties and the ability to pay debts before making its ruling. In the Rehn case the court divided the marital debts based on the parties income. The husband in that case made 80% of the total income for the home, while the wife made 20% of the income. The court divided the total marital debt by these same ratios making husband responsible for 80% of the marital debt and wife being responsible for the remaining 20%. The appellate court upheld this division of marital debts, stating it was supported by the evidence provided to the court.
In preparing for divorce you will need to obtain all financial documentation pertinent to your marital relationship, including all marital debts, assets, and income. You will use this information to provide the court with all the evidence necessary to support your position regarding marital debts, and why you should or should not be accountable for them. To help you with this process we’ve created a Questionnaire for you to complete, whether you use our firm our not!