If you live in Pennsylvania and are headed for a divorce, you will not only need to decide how to divide your assets, but you and your spouse must address your debts.
Pennsylvania is an "equitable distribution" state, which means that a married couple's marital assets and debts are divided in a fair and equitable manner – but not necessarily equally.
Ideally, you and your spouse will reach an agreement about how to divide your marital property and debts, but if you cannot reach such an agreement, the judge will have to decide for you. We don't usually recommend this route, since no judge can possibly understand your marriage or finances as well as you and your spouse.
Under Pennsylvania's marital property laws, both spouses are responsible for the debt acquired during the course of the marriage, regardless of who incurred the debt. In the court's view, a debt is considered to be "marital" as long as it was acquired after the marriage took place, but before the separation.
So, if your wife put $1,500 worth of clothes on a credit card before the divorce was filed, you could be held liable for that debt, even though you didn't incur the debt. Or, if your husband bought a new motorcycle this year, you are liable for that debt if it was incurred while you were still together.
Spouses Can Agree on Debt Division
Generally, spouses will decide on how to divide marital debt when they get divorced. For example, the wife agrees to pay of her credit card debts, while the husband agrees to pay off his. Or, if the couple has a joint credit card, the husband who bought a camping trip to Alaska on that card may agree to pay it off.
If you and your spouse have debt, the best thing to do is pay it off before the divorce if you can afford it. If you don't pay off all of your marital debt, you must remember that if your spouse agrees to pay a debt and they fail to do so, for example, because they fall on hard times, that does not stop the creditor from pursuing payment from you.
It's a risk you take if you do not pay off a marital debt before you divorce.
Here are our suggestions:
- If possible, pay off your debts, such as medical bills and credit cards before the divorce is final.
- If you have joint credit card accounts, cancel them or switch them so they are only in one spouse's name.
- If your spouse is an "authorized user" on your credit cards, cancel them as authorized users.
- Be sure to get a credit card in your name alone for emergencies.
- Closely track your credit each month so you know what is happening.
When you get a divorce, it's important that you protect your credit standing and not allow your credit to be negatively affected by the divorce. You will need good credit to obtain credit cards in your name, get a new rental apartment or home, and obtain auto loans in the future.
If you need more detailed advice about debt division, contact Cairns Law Offices for a free case evaluation. Call today to learn about our low-cost divorce services!