Dealing With Debt During Divorce

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Debt, whether it be loans or money owed to a credit card account, can be a serious financial burden to divorcing couples. During a divorce, dual income spouses must transition into single income households, which means they must adapt and change their lifestyle. Having less money to support themselves can lead to a higher amount of debt, either because they can afford their previous lifestyle, or they are unable to keep up with loan payments.


All debt incurred during a marriage is treated in the same manner as marital assets. This means that debt is subject to equitable distribution, and must be addressed before the divorce is finalized. Debt can be divided in a number of ways, each of which is specific to an individual case. Some couples may choose to divide debt evenly and pay an equal share until there is no longer an outstanding balance. Other parties may elect to be solely responsible for a debt if they are awarded a particular cash asset or piece of property.

It is important to note that the term “equitable distribution” does not mean “equal” or “50/50”. Rather, the concept of equitable distribution was put into place to divide assets and liabilities fairly between parties to a divorce action.


There are many cases where former spouses cannot come to an agreement regarding the distribution of debt. In instances such as these, the court will intervene and issue an Order detailing how marital debt is to be divided. When this happens, a judge will review relevant financial information, each party’s Statement of Net Worth, and take into consideration which person is more capable of paying off a debt.

Unfortunately, court orders regarding marital debt aren’t always addressed accordingly. A party will neglect to abide by the court order be refusing to make payments, or because they cannot afford to make timely payments. Neglecting debt poses a very serious risk to both parties, as federal law allows non-payments to impact both spouse’s credit scores, even if there is a court order addressing how marital debt is to be addressed.

If a person suspects their ex is acting negligently and not abiding by the terms of a court order, they need to contact a lawyer immediately. An experienced matrimonial or family law attorney will be able to file an enforcement petition with the court, and if successful, the guilty party may face contempt charges. Such charges can include additional fines or jail time.


Divorce litigants can accrue more debt during the course of their action. Commonly, divorce debt increases either because of a vindictive spouse, refinancing loans, and rising legal fees.

Vindictive and callous spouses will purposely rack up credit card debt without their ex knowing, spending hundreds or thousands on unneeded items. They may even withdrawal large sums of money from joint accounts. Both of these examples are in direct violation of New York State’s Automatic Orders, and are subject to contempt charges.

Contested, high net worth divorce cases are notoriously expensive. Feuding spouses often argue over many small issues, pressuring their attorneys to file motions and litigate in court. This work is time consuming and very detail oriented, and leads to mounting legal fees.


Avoiding post-divorce debt coincides with having a successful and financially secure life as a single individual. In order to ensure financial security, one must take steps during their case to remain “in the black”, meaning they do not incur additional debt. This can be done by having a sound understanding of their finances, and how their net worth or monthly spending corresponds with their annual income.

Changes in lifestyle, keeping loan payments up-to-date, and monitoring expenses are great ways to help ensure financial security and avoid post-divorce debt. Some litigants will benefit from working with a financial planner, while others are able to track their spending and financial obligations on their own.


Retaining the right representation is the first step a litigant can take to help ensure their assets and liabilities are addressed correctly during divorce. A matrimonial lawyer should have a thorough understanding and comprehension of debt and economics, and how to advise their clients when it comes to their finances. The family law firm of Brian D. Perskin & Associates P.C. specializes in contested divorces that have unique and complicated financial aspects. For more information, contact Brian and his team to schedule a free and confidential consultation today!

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