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How is Debt Divided in a Divorce in Georgia?

by Sharon Jackson  on May 23, 2024 under 

In Georgia, debt incurred during the marriage is typically considered "marital debt" and divided equitably between spouses as part of the divorce settlement. However, there are exceptions and strategies that can impact how debt gets allocated.

Here is a guide to understanding Georgia law regarding debt distribution. To protect your financial interests in your specific situation, work with experienced divorce attorney Sharon Jackson. She assists clients throughout Gwinnett County and beyond in all aspects of divorce, including complex asset and debt division. To schedule a consultation, call (678) 909-4100 today.

Overview of Marital versus Separate Debt in Georgia

Georgia is an "equitable division" state when it comes to splitting marital assets and debts in a divorce. This means that the overall division does not need to be exactly 50/50 or equal, but rather what the court determines to be fair given the totality of the circumstances. Further, only “marital debt” can be divided; any obligation that the court considers “separate debt” will stay with the spouse who originally incurred it.

In determining what constitutes marital debt, Georgia courts will generally look at whether the liability was incurred "during the marriage and before the date of separation." This may include:

  • Debt taken on jointly by both spouses
  • Debt taken on individually but used to pay shared marital expenses
  • Mortgages, car loans, credit cards, and personal loans that either spouse took out during the marriage.

Separate or non-marital debt that generally stays with the incurring spouse includes:

  • Debt brought into the marriage by one spouse
  • Debt incurred after date of separation
  • Student loans or tax debt that either spouse incurred prior to the marriage.

The rules on marital versus separate debt and who is responsible can become complicated. Divorcing couples often encounter issues like commingling of finances, paying down premarital debt with marital funds, using joint credit cards after separation, and more. An attorney can help you understand your situation and protect your rights.

How Georgia Courts Divide Debt

When equitably dividing marital debt, Georgia courts may consider factors like:

  • Which spouse incurred or benefited from the debt
  • Income and earning abilities of each spouse
  • Age, health status, and needs of each spouse
  • Duration of the marriage
  • Presence of minor children requiring support.

The judge has significant discretion in how debt is allocated. In some cases, one spouse may be ordered to be fully responsible for repaying a particular joint credit card or loan. However, it is more common for the court to order that each spouse pay a percentage of debts rather than just assigning all debt to one party.

Am I Responsible for My Spouse's Debt After Divorce?

One common question on marital debt division is whether you can be held responsible for debts that your spouse incurred, especially if the debts are solely in their name. In Georgia, the general rule is that marital debt should be divided equitably between the spouses as part of the divorce. So even if a personal loan is only in your spouse's name, if the debt was acquired during the marriage, you may still be ordered to pay a portion of it.

On the other hand, if the debt is clearly separate, was brought into the marriage, or accumulated after separation, the court typically will not hold the other spouse responsible. Non-marital debt usually remains with the incurring spouse.

Your divorce attorney can help argue your position if you believe certain debts should be deemed separate and not your responsibility. But in many cases, even with only one spouse's name on the account, joint responsibility for marital debt is common.

Strategies for Managing Debt Division

Working closely with your divorce lawyer, you can employ strategies to help secure a favorable debt allocation:

  • Provide documentation – Bring account statements, records of who has made payments, and other relevant records to demonstrate facts about existing debts.
  • Argue hardships – Explain to the court how taking on more debt would pose an undue hardship given your income, expenses, and circumstances.
  • Negotiate creatively – Offer to take on more debt in exchange for greater property division or other concessions.
  • Refinance jointly held debt – For assets like the marital home, sometimes spouses will agree to refinance into just one person's name to facilitate transfer.

An experienced Georgia divorce attorney will know the best strategies to take in your situation. Don’t hesitate to consult with Attorney Sharon Jackson who has nearly 20 years’ experience in this legal field.

Who Pays Credit Card Debt in Divorce?

Credit card debt is one of the most prevalent types of marital debt that must be divided in divorce cases. Determining who pays credit card balances can be complicated because often, both spouses have used the cards for joint household expenses. When negotiating credit card debt division, your attorney will gather evidence regarding factors like:

  • Whose name is the primary cardholder?
  • Who has made payments or contributed to the card over time?
  • What types of purchases were made – joint expenses or individual?
  • Do the charges accurately reflect spending during the marriage?

Based on these factors, your lawyer can argue to the court why you should not be responsible for all or part of credit card balances. The judge will then make a determination about how to equitably split responsibility for repayment of the marital credit card debt.

The court may order, for instance, that each spouse pay 50% of joint credit card balances. More commonly, the distribution can be uneven based on aspects like future earning potential and who primarily benefited from purchases. The bottom line is that both spouses generally share liability for credit debt accumulated during the marriage.

Other Factors Regarding Debt and Divorce

A few other things to keep in mind when dealing with debt in your Georgia divorce:

  • Creditors are not bound by divorce decree terms – While the court can order one spouse responsible for a given debt, the creditor can still seek to collect from either party, especially on joint accounts.
  • Ongoing credit obligations – It’s best to remove your ex’s authorization to use your credit card after you separate. Having credit cards still linked to your ex can negatively impact you if they incur more debt even after divorce.
  • Tax debt implications – In some cases, the IRS can pursue one former spouse for tax debt incurred jointly during marriage, even if the divorce decree assigned it separately.
  • Bankruptcy may become an option – If the total marital debt burden assigned makes your financial situation untenable, bankruptcy may be an option to discharge some joint debts.

Why You Need a Knowledgeable Attorney on Your Side

Without legal guidance, it can be extremely challenging to divide marital property and debt while still addressing your future financial needs. This is especially true for high-net worth divorces involving complex assets and substantial debts. But regardless of the size of debt, you need to ensure your financial outlook is protected.

Attorney Sharon Jackson has assisted countless clients in negotiating fair debt division agreements. She is sharp in asserting her clients’ position, and creative in developing solutions to protect their financial future after the marriage ends.

To schedule an initial consultation with our law firm, call us at (678) 909-4100 or contact us online today.

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