Who is responsible for debt in a divorce in Arizona?

Divorce is a complicated and most often difficult experience for couples. When money is involved, the emotional and financial connection is broken. Couples divorcing will have to decide how to split up anything and everything from furniture, possessions, the dog, and any debt that was accumulated in the marriage.

Who is responsible for which debt? More importantly, how do spouses protect themselves from the responsibility of an ex’s debt?

Technically, if your name is not listed on the debt, you are not legally responsible. So if you are going through a split, there may be a moral obligation to the other partner, especially whatever incurred in the debt benefited both of you. This moral obligation really depends on the nature of the relationship, where you live, and if you were married to your partner.

How to handle debt in a breakup? If not married, the person whose name is on the debt is responsible for repayment. Debt circumstances happen in many relationships. It’s when the relationship ends that makes life a bit more difficult. For example, you and your partner accumulate a credit card balance with the expectation that each would contribute to the payment. Reality? The name on that card is legally responsible for the bill.

Clearly, the best way to handle debt in the event of a breakup is to work together on how to split up the debt that was incurred while a couple. When the relationship is ending, however, this is not easy to do.

A cohabitation agreement may be established for couples not married to protect themselves from a potential breakup. Deciding in advance how debt or property would be divided in case of a split may help any discussion about handling debt. An official contract as such is an advantage when dealing with debt and a breakup.

Without a written agreement, a couple will have to come to an agreement to pay the debt, or possibly take the issue to small claim court for a judge to decide. A fair manner may be a 50/50 split, or one that is proportional to each income.

If you are married and have debt, then go through a divorce, rules do apply to your debt depending in which state you live. Debt before marriage stays with that spouse in a divorce. Debt accumulated together, however, will be assessed according to the state law.

Arizona is a “common-law” state, which means if a spouse’s name is on the debt, it is their responsibility once divorced. It is best to consult with an experienced divorce Arizona attorney, as each case has unique circumstances. Whether or not the debt is considered marital debt, or how the debt is related to the divorce case should be discussed with a lawyer.

Another way couples getting married protect themselves financially is through a prenuptial agreement. This contract is fairly common, and a spouse need not have tons of money or assets to access this agreement. A prenup is a contract to help make sure both partners understand who is responsible when it comes to finances and debt.