For most people, the word divorce conjures up images of property division: the house, the car, maybe a retirement account. However, for many divorcing couples today, and especially those where one or both spouses carry a significant amount of debt, the issue isn’t who gets what but who owes what. Debt separation during divorce proceedings triggers both emotional responses and financial repercussions similar to asset division.
If you’re contemplating divorce and you owe more than you own, know that you’re not alone. In fact, understanding how Kansas law treats marital debt is the first step toward protecting your financial future.
About Stange Law Firm
Stange Law Firm has been assisting families with divorce and financial difficulties, including debt division, in Kansas for almost 20 years. Our Topeka attorneys know how overwhelming it can be to be in a situation where you are uncertain about the future, both emotionally and financially.
We have significant experience with the Shawnee County District Court (11th Judicial District), where many of our clients’ cases are heard, and we can work with you one-on-one to guide you through the legal process and protect your rights while working towards equitable and practical resolutions.
Understanding Marital Debt vs. Separate Debt
Under Kansas’s equitable distribution rule, assets and debts are divided fairly, though not necessarily equally. Any debt accrued during a marriage, even if it is solely in one spouse’s name, is considered marital debt. Meanwhile, separate debt refers to debts that were obviously unrelated to the relationship or existed prior to the marriage. Examples of this would be:
- Marital debt is the result of using a joint credit card for household expenses and groceries.
- One spouse’s premarital auto loan is considered separate debt.
- Marital debt is the result of a medical bill for surgery performed during the marriage.
If the debt benefited the household, the court may still hold both parties accountable even if one spouse’s name is not on the account.
In one survey, 42% of individuals who divorced said their divorce was influenced by their credit card debt and expenses. Over one-third acknowledge concealing debt. In this year’s survey, 32% of respondents had a five-figure balance, while the majority reported balances of less than $1,000. Roughly one-fifth of those surveyed had a balance of at least $15,000.
What Happens When You Owe More Than You Own
For some couples, the marital estate is largely composed of debt rather than assets like savings or a house. In these situations, equitably dividing debt may be more difficult than dividing property. The court will typically consider the following factors:
- Each spouse’s income
- Earning potential
- Who benefited from the debt
- The ability of each spouse to repay the debt
If one spouse earns substantially more income, the court might order that spouse to take on a greater share of the debt, especially if the other spouse cannot realistically afford to pay. However, the creditor isn’t legally required to follow the divorce decree. If your name is on a loan or credit card, the creditor can still come after you for payment, even if your ex-spouse was ordered to pay it. This is why it’s so important to address debts before finalizing a divorce.
When Bankruptcy Is a Part of Divorce
For couples who owe more than they own, bankruptcy may also become a part of the equation. Whether bankruptcy is filed jointly before or individually after divorce can have significant legal and financial implications.
Filing jointly prior to divorce, for example, can sometimes eliminate joint debt and ease the property division process, while filing individually after divorce may be more appropriate if one spouse is assuming a disproportionate amount of debt.
Bankruptcy doesn’t discharge all types of debt. For example, most student loans, child support, and alimony obligations are not discharged by bankruptcy. It’s important to consult with both a family law attorney and a bankruptcy lawyer before deciding.
How a Lawyer Can Help
A divorce lawyer can assist you with complex financial matters, such as the division of debt, credit protection, and negotiation of fair repayment terms. They can properly document all assets and liabilities, prevent unfair creditor actions, and work to establish a settlement that protects your financial future after divorce.
FAQs
Q: How Is Debt Divided in a Kansas Divorce?
A: Kansas divides debt under the state’s equitable distribution laws. This means debt is distributed equitably, which is not necessarily the same as equal. The court will consider each spouse’s income and earning potential, as well as which spouse benefited from or incurred the debt. A debt may be considered marital even if it’s only in one spouse’s name.
Q: What Happens if We Owe More Than We Own in a Divorce?
A: If your debts are greater than your assets, the court will still divide them equitably. This can translate to awarding more debt to the spouse with the higher income or earning potential. Creditors are not bound by divorce orders, though, so your name could remain on certain accounts if not refinanced or paid off during the process.
Q: Are Credit Card Debts Considered Marital Debt?
A: Yes, if credit cards are used for household or joint expenses, the balances are usually considered marital debt, even if the account is in only one spouse’s name. Credit card debt incurred for personal or imprudent purchases, gambling, or purchases made without the other spouse’s knowledge or consent can be allocated to the spouse at fault if the other spouse can prove there was no benefit to the marriage.
Q: What Happens to Medical Bills During a Divorce?
A: Medical debt accumulated during the marriage is presumed to be marital debt in Kansas. The court will divide it equitably, considering each spouse’s ability to pay and which spouse received treatment. Medical bills can become a point of contention in settlements, particularly if one spouse has continuing care needs or a chronic condition.
Contact Stange Law Firm Today
If you have more debt than assets in your divorce, a lawyer at Stange Law Firm can help you fight for a fair outcome. Contact us today to get started.