Division of Marital Debt in Colorado Springs Divorce

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During the course of a marriage, most couples acquire not only assets, but also debt. Marital debt must also be divided in dissolution. Any debt obtained in the course of the marriage, regardless of whose name the debt is listed under, is marital debt. Arguments for unequal allocation can be made as to debt incurred after the parties physically separated or debt that benefits only one party after separation. There also may be debt for attorney's fees. Sometimes one party asks the other to cover the fees. The general rule is that each party covers his or her attorney’s fees; however, in the event of a substantial disparity in income, one party may be required to cover some or all of the other's fees prospectively or retroactively. A motion for prospective attorney’s fees can be filed early in the case to request fees for the less-monied party based on a substantial financial disparity.

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Debt allocation should be specifically identified with a clear statement of who will be responsible for the debt. This is particularly true of joint debt. A lender usually will not agree to simply have one debtor’s name removed from a debt, as it is in the lender's interest to have recourse among both parties in the event of nonpayment. If one spouse does not pay a joint debt, it will have an impact on the other's credit score. The harmed spouse will then have contempt of court action recourse in domestic relations court.

If a court decides an equitable division of debt, it will divide debt fairly but not necessarily equally. A common misconception is that debt taken out only in one spouse’s name during a marriage is separate property. However, it does not matter in whose name the debt is held. If it was incurred during the marriage, it is marital debt. Commensurately, debt acquired prior the marriage is separate debt. Though the appreciation of the debt during the marriage, if any, is marital debt.

Turning Change Into Opportunity in Colorado Springs, Colorado Divorce and Child Custody

A highly knowledgeable and experienced Colorado Springs divorce and child custody lawyer can guide you through Colorado Springs divorce and child custody matters by negotiating, mediating and litigating on your behalf. You can focus on moving to a better future instead of spending your time attempting to navigate complex legal rules and procedures.

Sabra Janko from Janko Family Law has more than 20 years of legal experience and has written “the book” on Colorado divorce and family law – “Colorado Family Law With Forms”, published by LexisNexis, which you can find at https://store.lexisnexis.com/products/colorado-family-law-with-forms-skuSKU02903. Contact us at 719-344-5523 or complete our online scheduling request for a free 30-minute informational consultation. We also offer paid advice sessions for a more in-depth analysis of your case.