QUESTION: Now that my spouse and I have officially separated, I moved out of our home last month, am I responsible for any debts he may now incur or is he 100% responsible for new debts?  I ask because he’s in the process of financing a new car.”

In today’s tough economy, it can be hard for a family to make ends meet. American families owe more than ever before. The average U.S. household has about $118,000 in debt. This includes the mortgage, student loans, car loans, and credit card debt. This debt must be dealt with before a divorce can be finalized.

Debt Incurred During a Marriage

When a couple gets divorced, the debts are divided between the spouses. How the debt is divided will depend on who incurred the debt and why the debt was incurred.

Some debts are joint debts incurred by both spouses. When a couple buys a house together, they jointly agree to be responsible for the mortgage. When they buy a car, both spouses are responsible for payments. Joint credit cards are also considered shared debts.

But, some debts are individual. If a wife has a store credit card in her own name, that debt may belong to her alone. She could also be responsible for her own student loans, especially if they predate the marriage. A husband is solely responsible for any child support or spousal support resulting from a former relationship.

In a community property state, both joint and individual debt belongs to both spouses. In Pennsylvania, and other states that follow “common law” property rules, joint debts are divided, but each spouse is responsible for his or her own individual debts.

There is an exception. Debt that is taken out to benefit the family belongs to both spouses, even if the debt was incurred by one spouse without the other’s knowledge.  Debt that pays for food, shelter, utilities, or the children’s needs is shared debt. This means that a husband who used a credit card to buy a stereo for his car could be solely responsible for that debt. But, the credit card bill for the children’s car seats would be shared between the spouses.

While this seems simple, it isn’t. There are many factors that determine how debt is divided, including each spouse’s income.

Debt Incurred After Separation

As soon as a couple separates, debts incurred by a spouse are individual debts. Again, there are exceptions. Debt that is incurred to benefit the other spouse, support family members or maintain joint property may be shared. And, a spouse may be held responsible for any debt on a joint account.

Debt After Divorce

After divorce, each of the former spouses is responsible for his or her own debt. However, it is important to be sure that any joint accounts are closed. If your ex uses a joint credit card or takes out a loan in your name, you could still be held responsible for payments.

3 Options for Dealing With Debt

Divorce attorney Thomas Petrelli discusses the three most common options for dealing with debt during a divorce. The first of these options is to pay off all the debt now. For those who can’t pay the debt now, a second option is to divide the debt and agree who is responsible for specific debts. A third option is to agree to pay off the debt equally.

A Philadelphia Divorce Lawyer Can Help

Dividing debt and resolving financial issues can be the most challenging part of a divorce. The attorneys at Petrelli Previtera can help you find an equitable and workable solution. Call 215-523-6900 to schedule an appointment.