Division of Debts and Liabilities in Divorce

At Adams, Luka, & Benton, P.A., we understand that divorce isn't just about who gets what; it's also about who pays what. In many Florida divorces, debts can become just as contentious as dividing property, especially when spouses have differing financial roles or spending habits. While many people enter a marriage with the idea of building a life together, they often overlook how deeply intertwined their financial obligations become. Credit card balances, auto loans, mortgages, and even student loans may all fall under the scope of what courts refer to as "marital debt." In Florida, the law requires that marital debts be divided fairly, or equitably, between spouses during divorce. This equitable division does not always mean an even 50/50 split. Instead, the court looks at what is fair under the specific circumstances of the marriage.

Florida courts operate under the principle of equitable distribution when assigning both assets and debts in divorce proceedings. Marital debt includes any liability incurred by either spouse during the course of the marriage, regardless of whose name the account is in. If a spouse used a credit card in only their name, but the purchases benefited the household, it is still generally considered marital. Non-marital debts, on the other hand, are those acquired before the marriage, after the filing date of the divorce petition, or for a purpose that was personal and unrelated to the marriage. Classifying debt correctly is one of the first and most important steps in determining who will be responsible for what once the divorce is finalized.

Equitable distribution requires courts to look beyond a simplistic split and take into account a wide range of factors to determine what is fair. This includes evaluating each spouse's financial situation, including their income, assets, employability, and future earning potential. A spouse with a higher income or more substantial post-divorce assets may be assigned a larger share of marital debt, particularly if the other spouse is left with limited financial resources. The court may also consider whether one spouse will be primarily responsible for raising children, especially if that responsibility limits their ability to work full-time. In such cases, judges may adjust the division of liabilities to avoid placing an unfair burden on the financially dependent spouse.

The duration of the marriage can also influence how debt is divided. In shorter marriages, courts may be more inclined to separate debts based on who incurred them. In longer marriages, especially those involving many shared obligations and jointly titled accounts, the financial lives of the spouses are more deeply connected, and courts often treat most liabilities as collective responsibilities. Additionally, courts consider the contributions each spouse made to the marriage, whether financial or non-financial. A spouse who stayed home to raise children or manage the household may be given favorable consideration, especially if the other spouse took on professional development or career advancement opportunities during that time.

The bottom line is it's your attorney's job is to give you a realistic understanding of which debts we can get your spouse to pay and which debts, if any, you would need to pay.

A key part of equitable distribution is examining whether either party engaged in financial misconduct during the marriage. If one spouse wasted marital funds or took on debt for a personal benefit not shared by the other spouse, the court may allocate that debt solely to the spouse responsible. This is known as dissipation of marital assets. For instance, if one party secretly racked up thousands of dollars in credit card debt to fund an affair or to support a gambling habit, that debt may not be split. Instead, the court may assign the entire obligation to the offending spouse as a way to ensure the other party is not unfairly penalized. Financial behavior during the final stages of a marriage can also come under scrutiny. If one spouse deliberately builds up debt or drains accounts just before filing for divorce, the court has the discretion to weigh that behavior heavily when determining liability.

The most common types of marital debt include joint credit cards, car loans, home mortgages, and personal loans. These are generally considered marital regardless of whose name is listed on the account, as long as the funds were used to support the household or benefit both spouses. For example, a credit card used for groceries, gas, and vacations would typically be considered a shared obligation. A car loan used to purchase a family vehicle is also generally marital, even if only one spouse's name is on the title or loan agreement. Mortgage debt presents unique issues, particularly when one spouse wishes to retain the marital home. In such cases, the spouse who keeps the property may also be responsible for the remaining mortgage balance. Alternatively, the home may be sold and the proceeds used to pay off the loan, with the remaining equity divided.

Business debts incurred during the marriage may also be subject to equitable distribution, even if only one spouse operated or managed the business. If marital funds were used to start or support a business, or if the business generated income for the family, the court may find that both spouses share in the obligation. Similarly, student loans are sometimes classified as marital debt, depending on how and when the debt was acquired. If a student loan was taken out during the marriage and the education benefited the family, courts may treat it as marital. On the other hand, if the loan was used solely for one spouse's education and there was no shared benefit, such as increased household income or financial gain, it may be treated as non-marital and remain that spouse's responsibility.

Medical debt accrued during the marriage is usually considered marital, particularly if the treatment was for a spouse or child and was paid for using family resources. Courts typically view healthcare as a joint responsibility and assign this kind of debt accordingly. Tax liabilities present another area of complexity. If spouses filed joint tax returns, any resulting tax debts are generally considered marital, even if the obligation arises from one spouse's mistake or underreporting. In some cases, the court may divide the liability based on responsibility, but joint liability still exists under federal tax law until an indemnification agreement or court order assigns it otherwise.

While Florida courts are prepared to make decisions on debt division, most spouses can benefit from resolving these issues through negotiation or mediation rather than litigation. At Adams, Luka, & Benton P.A., we often help clients settle debt-related disputes privately, allowing them to retain more control over the process. Negotiated agreements can be tailored to fit each spouse's financial situation and priorities. For instance, one spouse may agree to take on more of the credit card debt in exchange for receiving a greater share of liquid assets or avoiding long-term alimony. Mediation allows for creative solutions that may not be available through the court system, such as consolidating joint debts, refinancing obligations, or arranging a payment schedule that works for both parties.

Private agreements are especially useful in situations where spouses maintain a working relationship or share responsibilities post-divorce, such as co-parenting. However, even in negotiated agreements, it's essential to document all terms clearly and have them incorporated into the final divorce judgment to make them enforceable. This protects both parties from future disputes or misunderstandings. Our attorneys ensure that any proposed agreement is fair, legally sound, and provides for contingencies that might arise down the road, such as bankruptcy, job loss, or remarriage.

One of the most overlooked aspects of dividing marital debt is the long-term financial impact. Once a divorce decree assigns responsibility for a particular debt, it becomes a binding court order. However, this does not release either spouse from their contractual obligations with the creditor unless the account is closed or refinanced. For example, if a joint credit card is assigned to one spouse but remains in both names, the other spouse can still be pursued for payment if their ex-spouse defaults. This is why we strongly recommend that all joint accounts be closed or refinanced into one spouse's name where possible. Refinancing home loans, transferring credit card balances, and executing indemnification clauses are important steps in ensuring that responsibility is enforceable and clearly separated after the divorce.

Debt division also affects credit scores and financial independence moving forward. If one spouse ends up saddled with more debt than they can manage, missed payments could damage their credit for years, making it difficult to buy a home, qualify for a loan, or start a new business. We help clients prepare for this by reviewing the impact of various debt division scenarios and helping them create a post-divorce financial plan. Sometimes this involves budgeting assistance, working with a financial advisor, or negotiating a structured payment plan during settlement discussions.

At Adams, Luka, & Benton P.A., our family law attorneys bring decades of experience in guiding clients through complex divorce cases involving significant financial liabilities. We serve individuals throughout Orlando, Winter Park, Maitland, and nearby Central Florida communities with a focus on strategic, practical outcomes. Whether your case involves significant debt, a small number of joint obligations, or complex financial misconduct by your spouse, we provide tailored legal advice that reflects your goals, your future needs, and the realities of your current situation. From initial consultation to final judgment, we are with you every step of the way, fighting to ensure that the burden of marital debt is allocated fairly; not simply based on paperwork or creditor names, but on what's truly just.

If you are facing a divorce and concerned about how debts will be divided, don't navigate it alone. Let the experienced attorneys at Adams, Luka, & Benton P.A., help you secure a fair and manageable outcome. Call our office today to schedule a consultation and take the first step toward protecting your financial future. We are here to help you move forward confidently and with clarity.