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Financial Debt and Divorce

When a marriage is terminated, marital property is divided by equitable distribution in Pennsylvania. Usually, people are most concerned about receiving a fair share of their assets. However, the debts of both spouses, accumulated both separately and together during the marriage, will also be divided and assigned.

Pennsylvania Divorce With Debt Lawyer

If you or your spouse has substantial debt, or if you have joint debt, it’s important to understand who will be stuck with the bill after the divorce. Our team of West Chester divorce lawyers at Ciccarelli Law Offices will seek a result that will not leave you with an unfair portion of the family’s indebtedness after a divorce.

Call (610) 692-8700 or send an online message for a free consultation so we can act as soon as possible. We are based in West Chester PA and serve clients throughout Chester County, Lancaster County and suburban Philadelphia including West Chester, Kennett Square, Oxford, Avondale, Landenberg, West Grove, Paoli, Malvern, Downingtown, Coatesville, Exton, Parkesburg, Berwyn and Devon.  We have convenient meeting locations in Lancaster, Philadelphia, Plymouth Meeting, Kennett Square, Malvern, Springfield, King of Prussia, and Radnor. Our family lawyers serve those with immediate legal needs in Chester County, Montgomery County, Delaware County and Lancaster County.

Information Center on Financial Debts After Divorce

Which Financial Debts are Considered for Divorce in Pennsylvania?

The most important factor in determining whether debt is marital property is when the debt was incurred. Debt incurred before the marriage is generally not considered marital property, and will stay with the spouse that had it before the marriage. Financial obligations that were incurred during the marriage is marital property, and will be divided by equitable distribution.

If, for instance, your spouse signed up for a credit card during the marriage and ran up a $10,000 bill, a significant portion of the bill could be assigned to you in the divorce, even if you didn’t use the credit card. But if your spouse got the credit card before the marriage, had a $5,000 balance when you got married, and then continued to use the card to ring up another $5,000, then $5,000 would be separate property and $5,000 would be considered part of the marital estate.

Student debt can also be part of the marital estate. If Spouse A goes to law school before the marriage and accumulates significant student debt, then the debt will not be part of the marital estate. However, if Spouse A goes during the marriage, then Spouse B could wind up being on the hook for a significant portion of the debt.

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How Debt is Divided in Chester County?

Financial obligations are divided the same way property is. The Commonwealth of Pennsylvania practices equitable distribution, which means that the court makes a decision to divide the marital estate in a way that is fair. This is not the same as equal distribution. The court looks at every item and divides it accordingly. It can, therefore, look at each debt and make a different division.

There are certain factors, under law, that the court may take into account when dividing marital debt. They include:

  • The length of the marriage.
  • The age, health, liabilities, needs, estate, and employability of each spouse.
  • The contribution of one spouse to the education, training or increased earning power of the other spouse.
  • The sources of income for each spouse.
  • The contribution or dissipation of each spouse in the acquisition, appreciation, and depreciation of the debt.
  • Whether either spouse will serve as custodian of any children.

The court may use any of these factors, or any other factor when determining a fair distribution. For instance, when determining who should have to pay back a credit card bill, the court could look at which spouse contributed the most to creating that bill. Or, the court could determine that Spouse A, who makes less money than Spouse B, is less able to pay the bill, and therefore assign the larger portion to Spouse B.

The court cannot use fault as a factor in determining equitable distribution. So, even if one spouse was responsible for the marriage dissolving through infidelity or desertion, it will not make a difference in who is stuck with the debt.

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Understanding Financial Obligations After a Pennsylvania Divorce

It’s important to take everything into consideration when pursuing marriage termination, and debt is certainly one of the most important issues. Our West Chester divorce lawyers at Ciccarelli Law Offices can help you avoid an unfair share of the debt. We represent spouses throughout Downingtown, Phoenixville, Landenberg, Villanova, Chester Springs, Media, Ardmore, Swarthmore, Newtown Square, Radnor, Devon, Berwyn, Greater Philadelphia, and nearby towns. Call us today at (610) 692-8700 for a free consultation about your legal options.

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