family law debt

The average U.S. household owes money. In fact, American households owe an average of $15,270 in credit card debt, $32,258 in student loan debt, and $149,925 in mortgage debt. During a divorce, debt will be divided between you and your spouse. However, if you aren’t careful, you could end up paying for debts you didn’t know about. Below is a breakdown of the basics regarding debt and divorce.

In Pennsylvania, marital debt is divided according to the rules of equitable distribution. This means that any debt incurred during the marriage is divided between the spouses, even if the debt was only incurred by one of them.

Credit Card Debt

Consult with your attorney about cancelling joint credit cards. It’s best to pay off the debt before the divorce or divide it and transfer it to separate cards in each partner’s name. You’ll still share the responsibility of making sure the debt is paid. If your ex decides not to pay, it could end up affecting your credit.

What about that secret credit card that you knew nothing about? How the court treats that debt depends on how your spouse used the card. Did he or she use the card to buy your child’s car seat and clothing? Or was your spouse using the card for secret hotel stays?  The court may consider the purpose of the debt when determining equitable distribution. However, without strong legal representation, you could end up paying for things you didn’t know about.

Student Loans

Student loan debt can be complicated. It may seem that a student loan debt would belong to the student who took out the loan, but this isn’t always the case. In almost every state, a spouse who benefits from student loans can be held partly responsible for the debt. This means that you may have to pay a portion of your spouse’s loans if your spouse was using student loan money to pay the rent, household bills, or groceries. You may also share the debt if your spouse was unable to work in his or her field while caring for young children or supporting your career.

Mortgage Debt and Divorce

Homes are typically expensive. It can take two incomes to stay on top of the mortgage and the household bills. Many people find that their best option is to sell the house, divide the proceeds, and start new. But, what if you owe more on your house than it is worth? In that case, it might be beneficial for the spouse with the higher income to keep the home. But, this isn’t always an option. You could sell the house and still end up in debt.

In today’s economy, debt is a reality. At Petrelli Previtera, we are dedicated to helping our clients find financial solutions that work. To discuss your financial situation and how to best move forward, contact our divorce lawyers at (215) 523-6900.