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Dividing debt in a divorce

Washington |

My wife and I are amicably divorcing. Unfortunately the amount we owe on our house is exceeds its market value. Additionally, she’s run up severe credit card debt and has substantial student loans. Given her debt overload, are we equally responsible for the house payments?

Attorney Answers 3

  1. When your wife ran up debt on the credit cards, it was the same as you running it up because you were married. It would be a community debt, unless you have something in writing saying you did not authorize, consent to, ratify her spending and did not benefit from it. Nonetheless, there is no such thing as "equal" division under Washington law, it can be 50%-50%, but does not have to be. If you are both on the mortgage, you are both responsible for the house payments and the debt payments. The court will likely divided up payment of these obligations similar to your income ratios.

  2. In New York, you would be equally responsible for the house debt and credit cards. The student loans may be her separate obligation, especially if they were incurred prior to the marriage. If the student loans resulted in her obtaining a degree or license, then that degree or license may be a marital asset which needs to be valued (the value is offet by the loan). This is a complicated issue and you should seek the advice of an attorney to help you with it. Good luck!

  3. It depends on what the law is in the state you live in. If it is a community property state then you are both liable for all marital debts. It sounds to me like the best thing you can do (assuming you cannot keep up the house payments) is give the deed back to the bank and work out some kind of payment plan with the credit card company. Many of them will take far less than what is owed just to get it off their books. You may need to pay a lump sum to do this, however, and I would suggest you negotiate together with the credit card company and then get a loan from a relative and pay it off. This sounds like the only way you will be able to get a fresh start,

    Of course if you make less than $50,000 a year, then bankruptcy is an option.

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