About Debt and Divorce in Arizona

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While many newly married couples aspire to live happily ever after, two out of every five American marriages end up in divorce. Even where a divorcing couple successfully handles difficult emotions associated with the process, divorce involves making hard decisions like how to divide marital debts. Division of marital debt is challenging and often contentious.
As with shared property, the court aims to divide marital debt fairly and equitably between the divorcing couples. However, the court must first determine which debts were incurred during the marriage and which weren’t. Typically, debt incurred during the marriage and not before the couple got married is divided equally in an Arizona divorce.

Types of Marital Debts

There are several types of marital debts in an Arizona divorce, including:

  1. Separate debts – these are debts incurred by either of the spouses individually before the marriage. It can also include debt incurred by a spouse after a divorce petition is served. The court assigns the debt to the spouse who incurred it.
  2. Community debts – these are debts incurred for marital purposes during the marriage. The court divides the debt equally during a divorce.
  3. Joint debts – these are debts that both spouses acquired in both of their names. For instance, when a couple jointly takes a car loan. Both spouses are equally responsible for the debt.

Arizona law also classifies marital debt into secured and unsecured debt. Secured debt is any debt taken against a particular asset or property. Unsecured debt is any debt that is not taken against any asset. Generally, a creditor may repossess property used as a lien in a secured debt but cannot do the same for unsecured debt.

Since Arizona is a community property state, it does not matter who incurs the secured or unsecured debt as long as it is incurred during the marriage. For instance, even where a person’s credit card payments are in their partner’s name, it is still community debt even though the person’s name is not on the credit card.
Besides the different types of debts, there are other considerations that the court can make when dividing marital debt, including who is in a better financial position to pay off certain debts. It is critical to consult a skilled and experienced Arizona divorce attorney as these considerations, and related exceptions can complicate the divorce process.

Dividing Marital Debt

With many divorcing couples disagreeing on how to divide their marital debt, the court often decides for them. The spouses can also seek the help of a skilled divorce attorney to help them navigate the complex legal challenges while protecting their rights and responsibilities.
While clear guidelines allow divorcing spouses to differentiate between community debt and separate debt, many spouses disagree on how to fairly and equitably divide the community debt. Even where the law classifies the debt as community debt, there are rare instances where it is not mandatory to divide it equally or 50/50. The judge has the discretion to divide the debt in any other ratio, including 60/40 or 70/30, in extenuating circumstances like considerably short marriages.

The court may even decide to assign community debt to just one spouse in some instances. The rare instances may include situations where a spouse incurs debt without the other spouse’s consent for the benefit of third parties, including lovers, relatives, and friends. The court may also require one spouse to individually pay debts incurred for things that are not beneficial to the other spouse or the marriage.

Contact a Divorce Attorney in Arizona

While divorce is already hard as it is, division of marital property and debt can easily complicate matters for the divorcing couple. With the division of marital debt involving many legal considerations, the process can be confusing and stressful. However, a qualified and experienced divorce attorney can help you navigate the process while protecting your rights. If you are in Arizona, our skilled divorce attorneys at RPM Law will guide you through the marital debt division process. Contact us today for a free consultation on all your divorce needs and to learn more about our services.