How to Strategically Manage Debts During a Divorce

• Determine who is responsible for each debt in a divorce and apportion it fairly according to various factors.

• Consider closing any joint accounts and opening individual ones if need be to avoid confusion.

• Consult with a professional to understand obligations related to the debts and to ensure everything is done legally.

• Negotiate down certain types of debt if possible or look into debt consolidation or credit counseling services to manage debts.

• Understand that each part of the divorce process should be handled with care and consideration.

Divorce can be a complex process and may be incredibly complicated if you and your spouse have accumulated debts. Understanding how debt is handled during a divorce is essential so that both parties are on the same page and accountable for their obligations. Read on to learn more about managing debts during a divorce.

Who is Responsible for What?

When managing debt in a divorce, the first thing to consider is determining who is responsible for what debts. Generally, the party whose name appears on the account will be held liable for any outstanding debts. However, if both parties incurred the debt, you may be jointly responsible for repaying it. To avoid confusion or surprises, it’s best to work with an attorney or financial advisor so that all parties know who is responsible for what.

A woman consulting a financial planner in an office

For example, if you have a joint credit card with your spouse, it’s important to designate who will be responsible for the outstanding balance. If one party cannot pay, the other party may be responsible for repayment. You may also consider closing the joint accounts and opening individual ones.

Some types of debt may also be shared or allocated depending on the terms of your divorce agreement. For instance, if child support or alimony payments are involved, the court may decide how those debts should be allocated. Child custody and support agreements typically require one parent to pay the other a certain amount of money each month for the care and upbringing of a minor child. It would be best if you talked to an experienced custody attorney to understand your rights and obligations.

How Should I Apportion Debt?

Once you’ve determined who is responsible for each debt, you need to decide how you want to apportion the debt between yourselves. Some couples split the debt evenly, while others divide it fairly. The most important thing here is that everyone involved understands and agrees upon how the debt will be divided before signing any legal documents related to the divorce settlement. Some factors that may affect debt apportionment include the following:

Income and Assets

If one party has a higher income or more assets than the other, they may be expected to take on more debt. It would help if you discussed what each could afford and divided the debt accordingly.


Each party should consider what debts are essential to pay off and prioritize those debts over others. Some debts, such as credit card or medical bills, should be paid off before other debts, such as luxury items or vacations.

Debt-to-Income Ratio

When apportioning debt, you should consider each party’s debt-to-income ratio. This will show how much debt each party has compared to their income. You may want to consider allocating the debt so that each party’s total monthly payments stay within their debt-to-income ratio.

Debt and income on opposite sides of a scale

Debt Type

Some debt types, such as student loans or credit card debt, may be treated differently during a divorce. Because student loan debt is typically the individual’s responsibility, it may be excluded from the property division.

Can I Negotiate Down Debts?

Sometimes, it may be possible to negotiate down certain types of debts (e.g., credit cards). If this is something that interests you, then make sure to talk with an experienced financial advisor or bankruptcy lawyer before attempting any negotiations yourself, as they can provide valuable guidance and advice about what approach might work best in your unique situation. In addition, they can help ensure that all negotiations are done legally and ethically so that no one gets into trouble down the line.

If you can’t agree on how to apportion your debts, then consider consulting with a debt negotiator. They specialize in helping couples tackle their debt in a way that works for both parties. You should also look into debt consolidation and credit counseling services, as they may be able to help you pay off or manage your debts in an organized way.

Managing debts during a divorce can seem daunting at first, but there are steps you can take to make sure everything goes smoothly and that all parties involved understand their responsibilities and obligations related to any outstanding debts. Be sure to consult with a financial advisor or attorney if you have any questions or concerns. With the right guidance, you can manage your debts in a way that works for both parties.

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