Dealing with debt is an important part of divorce proceedings

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When an Arizona couple decides that the marriage is no longer viable, there are a number of things that must be considered. Typically, who will get the house and how will assets be divided are top of mind during the initial divorce negotiations. However, in addition to these important decisions, how debts will be handled needs to be addressed.

Arizona is a community property state. As such, assets and liabilities accumulated during the marriage belong to and are the responsibility of both parties. In other words, even debts that are held in only one name can become the responsibility of the other individual.

Once it has been determined who will be responsible for which debts, decisions regarding how to separate debt so that only the responsible party is held responsible need to be made. For instance, car loans are often held in both names. However, so that the individual not responsible for the repayment of the car loan per the divorce decree does not still remain obligated from the lender’s perspective, it is often necessary to refinance the loan. Credit cards are another area that will need to be addressed. It may be necessary for each individual to open credit cards solely in his or her name and transfer the balance that the individual is responsible for to the new card.

Mortgage debt can be more of a challenge. Many times the lender will not remove one of the spouses from the note. This often makes it necessary for the mortgage to be refinanced. However, if the individual responsible for this debt is unable to qualify for the new mortgage, this may not be an option.

The division of debts can be a critical part of the Arizona couple’s divorce negotiations. In order to protect the individual’s credit, it is often necessary to find a way to separate the debt and not have to depend upon the other individual to follow through with his or her part of the responsibility. An experienced attorney can assist in structuring the agreement in an appropriate manner and making recommendations regarding how to address these concerns.

Source:, “What Happens to Debt After Divorce?“, Holly Johnson, March 30, 2018