When we commit for better or worse, we also contract combining assets and responsibilities for debts in some form or another. Each state is a bit different, but nonetheless, while most couples immediately start to look at who gets what when it comes to things in a divorce, the fact is that the courts also look at who gets what when it comes to debts. When your marriage ends, it is time to take a snapshot of all that you have together and look at that snapshot with the mind of a judge who is trying to equitably divide all and ensure the best possible chances for each person to start over.

The days of proving a spouse so awful that they deserve nothing are gone in most family courts. While there remain statutes on the books in various states that divorce can be granted based upon everything from abandonment to substance abuse, from infidelity to failure to consummate a marriage, the fact is that most of the cases filed are asking for divorce based upon irreconcilable differences. A reason for this is simply that the complexity of our values and lives has made it very difficult to meet the high standards and long litigation required to prove that any of the other reasons are sufficient to end a marriage and seek damages, and even so, both people are expected to be responsible for themselves post-divorce.

So, when a couple reaches the point of deciding to break the bonds of matrimony, the entire bucket of belongings and losses gets reviewed. In the recent decade of financial losses around the country and world, couples are often disappointed by the fact that their current list of assets and debts holds no resources to reimburse for things that they have spent or given to each other throughout the marriage. Many times a couple with a house that is upside-down in value has one party insisting that any past equity was theirs and should be provided somehow at the time of divorce. In fact, this is often not the case. Unfortunately for some who wish otherwise, the spending patterns of marriage seem to catch up at the time of divorce. Add to that the repercussions of the economic climate at the time a couple decides to divorce, and many couples are realizing that their finances may just be the straw that broke the camel’s back in their marriage. There may be no redress for money spent or money lost on investment dreams, and both people must face this reality and consider how they will begin again.

State laws vary regarding some of these issues; however, usually any creditors will look to both people for payment of debts, in spite of what is set forth in a decree. So there are steps to take to clean up the double indemnity and provide for individual accountability at the time of the divorce. Some couples reach for bankruptcy, and there are reasons to consider this course prior to filing for divorce as the federal bankruptcy laws supersede the local court’s authority to assign debts. A consult with a bankruptcy attorney prior to filing for divorce is important if either party is considering such a course.

If bankruptcy is not in the picture, then the debts must be divided and assigned to the each person in a manner that is balanced and reasonable. One person will not usually be allowed to keep all the assets while the other receives all the debts. Credit accounts need to be closed or one of the owners of the account needs to take over the debt officially in the eyes of the credit company. This may be in the form of refinancing a mortgage, refinancing a vehicle loan, or signing documents with credit card companies releasing one or the other person from any remaining debt on an account. It is usually simpler to close credit card accounts and reopen them as individual accounts after the divorce is final. However, there is no definitive guideline on this as each couple’s financial circumstances are different, and some people may not be able to open accounts after a divorce, therefore requiring another option to be provided.

The bottom line is that the debt does not go away at the time of a divorce. Each person will remain responsible for any and all debt, unless and until such debt is either paid off or refinanced in only one person’s name. Therefore, when considering divorce, one of the questions becomes this: How can we clean up our finances now so that both our futures can be brighter?