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Debt responsibilities and divorce

On Behalf of | Apr 7, 2023 | Divorce |

When spouses file for divorce in Oklahoma, there are several issues that both parties typically address. Asset division and support payments are among the matters discussed during settlement negotiations. Another essential element involves the responsibilities for incurred debt. Several factors contribute to how estranged couples have to deal with their obligations.

Debt and divorce

Oklahoma is an equitable distribution state, so the court would seek to divide the debt fairly among the parties if the parties cannot come to a resolution on their own. Fairly does not necessarily refer to a 50-50 division of debt, as one spouse could earn substantially more than the other. One spouse could even suffer from medical issues that limit their earning capacity. The court may consider those circumstances.

Not all debt is the same. Some debt could be held jointly, and other debt could be held in one spouse’s name alone. A spouse who lavishly borrowed on a credit card in their name may face requirements to pay that debt. However, there could be circumstances where the court orders one spouse to pay the other spouse’s obligations.

Divorcing spouses should know that the court renders decisions when the parties cannot agree. While the court will have the final say over a divorce decree, an amicable and reasonable agreed-upon settlement might better address debt issues rather than a court fight.

Debt negotiations

During the divorce negotiations, the parties may decide on who pays what debt. It’s possible that one spouse may agree to pay all the debt. One spouse might agree to pay all or a large portion of debt in exchange for a specific property, such as a vacation home.

When the parties cannot agree, they could enter into mediation. Mediation could result in both parties accepting the mediator’s suggestions, which might be better than letting the court decide.