When most people think about divorce, they focus on dividing assets like homes, bank accounts, and retirement funds. But debt can be just as important—and often more complicated. Understanding how debt is divided during a divorce in Pennsylvania can help you protect your financial future and avoid unpleasant surprises after your case is finalized.
Pennsylvania’s Approach: Equitable Distribution
In Pennsylvania, debt division during a divorce is governed by the principle of equitable distribution. This means marital debts are divided fairly, but not necessarily equally, between spouses.
Rather than automatically splitting everything 50/50, the court looks at the full financial picture of the marriage and determines what division is just and reasonable under the circumstances.
What Debts Are Considered Marital?
Generally, debts incurred during the marriage are considered marital debts and are subject to division. Common examples include:
- Joint credit card balances
- Mortgages
- Car loans
- Medical bills
- Personal loans taken out during the marriage
Even if a debt is only in one spouse’s name, it may still be considered marital if it was incurred for the benefit of the marriage.
What Debts Are Usually Separate?
Certain debts are typically considered separate and remain the responsibility of the individual spouse who incurred them. These often include:
- Debts incurred before the marriage
- Debts taken on after separation
- Personal debts that did not benefit the marriage
However, classification can depend on the specific facts of the case, which is why legal guidance is so important.
Factors Courts Consider When Dividing Debt
When deciding how to allocate marital debt, Pennsylvania courts may consider factors such as:
- The length of the marriage
- Each spouse’s income and financial stability
- The purpose of the debt
- Who benefited from the debt
- Whether the debt is tied to an asset being awarded to one spouse
For example, a car loan may be assigned to the spouse who keeps the vehicle, or credit card debt may be allocated based on who incurred the charges and why.
An Important Warning About Creditors
One critical issue many people overlook is this: creditors are not bound by divorce decrees.
Even if your divorce agreement states that your spouse is responsible for a joint debt, the creditor can still pursue either spouse if both names are on the account. This means you could still be held liable if your ex fails to pay.
Because of this, additional steps are often necessary, such as:
- Refinancing loans
- Paying off joint debts
- Removing one spouse’s name from accounts
- Closing joint credit lines
These steps can help prevent future financial exposure after the divorce is finalized.
Protecting Yourself During Debt Division
Debt division can have long-term consequences on your credit, finances, and peace of mind. Working with experienced professionals who understand both divorce law and financial implications can make a significant difference.
Our team of experienced divorce attorneys, debt attorneys, and accountants works together to ensure your interests are protected when debts are divided in a divorce.
If you have any questions about the topic discussed in this article, or any divorce law matter, please give us a call at Bononi & Company Greensburg, PA 724-832-2499.