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Philadelphia Family Lawyer > Blog > Divorce > Dividing Debt in a Philadelphia Divorce

Dividing Debt in a Philadelphia Divorce


In a Pennsylvania divorce, all property acquired during the marriage is considered property of the marital estate. The same holds true for debt. Any debts incurred during the marriage are the responsibility of both parties regardless of which party incurred the debt. In this article, the Philadelphia property division attorneys at the Law Offices of Lauren H. Kane will discuss the distribution of debt during a Philadelphia divorce.

Marital versus individual debt 

Pennsylvania courts will characterize debts as either marital or nonmarital prior to dividing the debt between the spouses. Marital debt is any debt that was incurred during the marriage and before separation. This includes mortgages, car loans, credit card debt, and personal loans. So long as this debt was acquired during the marriage, it is considered property of the marital estate. That means that the debt will be divided equitably between both parties once the divorce is finalized. It doesn’t matter which party incurred the debt; both parties are responsible for it.

Individual debt is debt that was acquired before or after divorce proceedings were initiated. This debt is not considered property of the marital estate and is the sole responsibility of whichever spouse incurred the debt.

In Pennsylvania, the debt is divided through a process known as equitable distribution. Below, we will discuss how equitable distribution relates to debts in Pennsylvania.

Equitable distribution of marital debt 

In some states, debts and assets are divided 50/50 among the spouses. That is not true in equitable distribution states like Pennsylvania. Instead, the debts are divided in a manner that is equitable. Factors that are considered include:

  • Each spouse’s income and earning power
  • Each spouse’s contribution to the acquisition of assets and debt
  • The length of the marriage
  • The standard of living acquired during the marriage
  • Whether one spouse will be awarded custody of the children

Separate property and debts are not subject to distribution during a divorce. The court, however, may take into account any separate property or assets that a spouse may have when dividing the marital estate equitably. The goal is to ensure that one spouse is not left holding the bag for all of the debt while not having any assets on which to draw.

Once the court has determined how it will divide marital assets and debts, it will issue an order that outlines each spouse’s responsibility for paying off that debt.

It’s important to note that creditors are not necessarily bound by the court’s order. If a couple jointly has incurred a debt, the creditors can still pursue both parties for the repayment of that debt. Couples will need to consider refinancing that debt or otherwise removing the other party’s name from that debt. Cosigned loans are generally the responsibility of both individuals regardless of which one incurred the debt. Handling these matters carefully during your divorce will help avoid debt collection issues down the road.

Talk to a Philadelphia Divorce Lawyer Today 

The Law Offices of Lauren H. Kane represent the interests of those filing for divorce in Bucks, Chester, Delaware, Montgomery, and Philadelphia County. Call our office today to schedule an appointment, and we can begin addressing your concerns right away.

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