Stewart Law Group Highlights Questions Around Debt After Divorce During Pandemic

February 4, 2021

Founder Scott Stewart explains how marital debt can be mitigated

Arizona residents considering a divorce should be aware of how it affects debt acquired during the marriage, typically one of the most difficult parts of the process, according to Stewart Law Group. “People tend to think about an upcoming divorce in terms of dividing the assets, but they also have to share the liabilities,” said Scott David Stewart.
“That can lead to some surprises, especially when one spouse has been the one to rack up debt.” As one of nine states that use a community property approach to divorce, Arizona treats nearly all debt that either spouse has accumulated as belonging to both when it is time to divide the household in two.
In community property states, anything earned or acquired during the marriage is considered to be jointly owned and is divided up 50-50 during a divorce. That includes mortgages, auto loans, credit card debt and even medical debt.
Apart from Arizona, eight other states are community property states — including California, Texas and Nevada — and others lean toward that model in principle.
Regardless of the divorce decisions, banks and credit card companies will come after both spouses if any debt is unpaid, Stewart said. He recommended paying off as much debt as possible before the divorce is finalized, noting that to protect your credit score you may have to make payments that your spouse was supposed to make and seeking re imbursement afterward.
“As painful as it is, it’s a lot easier for a divorcing couple to split up their assets than to decide who has to pay off their debt,” Stewart added. “Before you move ahead with your divorce, make sure you have talked with your lawyer about how to handle your share.”
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