Division of Debt in an Arizona Divorce

Arizona Divorce: Dividing Debt

We get a lot of questions about the division of marital assets. We get just as many questions about the distribution of debt during an Arizona divorce. Marital debts are treated the same as marital property. They will both be included as the family court attempts a fair and equitable division of all marital property. When dividing debt in an Arizona divorce, there are two main options: you may pay off all of your marital debt before filing for divorce or share responsibility for the debt during settlement negotiations.

Division of Debt in an Arizona Divorce.

Division of Debt in an Arizona Divorce.

Many couples cannot afford to pay off all their debt before filing for divorce. If that is the case, settlement negotiations are the remaining option. The problem that arises when attempting to determine who will be responsible for which debt is that, post-divorce, your former spouse may not pay the debts as agreed upon.

When this occurs, you are still responsible regardless of the fact you agreed differently during the divorce. It may seem odd, but lenders do not recognize divorce court orders and are not bound by those orders because they were not a party to the divorce case.

For those reasons, it is much better if the parties either pay off all the martial debt prior or during the divorce. Alternatively, spouses may just refinance or transfer the obligations into their names. This allows for a clean financial break.

If you would like to discuss debt as a part of the marital property divided during a divorce, please get in touch with the experienced Scottsdale and Phoenix Arizona divorce attorneys at Hildebrand Law at (480)305-8300.