How Is Marital Debt Divided in a Divorce in Georgia?
By Beverly Bird
Georgia is an equitable distribution state, so one spouse always runs the risk of having more than half the marital debt assigned to him for payment in a divorce. Courts in equitable distribution states are not obligated to divide marital property or debts 50/50. The law gives judges the discretion to distribute debts and assets between divorcing spouses in a way that seems fair. Judges can take several factors into consideration, including the respective incomes of the parties and their ability to pay. This can result in a 60/40 distribution of debt, or even 70/30.
Under Georgia law, marital debt is all the debt you or your spouse acquire, together or separately, after your wedding. If you take out a credit card or loan in your sole name, it's still marital debt, even if your spouse isn't on the account. Georgia divorce courts are concerned only with debts incurred after marriage. If you contracted for a debt before you married, that's your sole responsibility, and the court won't order your spouse to help you pay it back.
Judges can consider a variety of factors when dividing assets and debts in equitable distribution states, and they may give more weight to one than to another. If one spouse made significant charges to a credit card for clothing or other personal expenses, the court might assign that debt to her. By the same token, if the other spouse earns twice as much, a judge might assign more overall debt to him, because he is better able to pay it.
Georgia courts take two approaches to dividing debt. They either assign various accounts to each spouse for payment, or they may obligate both spouses to pay a certain percentage of each account after the divorce until the accounts are paid off.
Georgia courts may treat secured debts, such as mortgages or auto loans, differently from unsecured debts like credit cards. Typically, if one spouse is keeping the home or the car, a judge won't order the other spouse to contribute toward those payments. Refinancing is usually necessary to put the account solely in the name of the spouse retaining the collateral. That spouse is usually responsible for paying that loan.
Eliminating the Problem
Georgia courts also allow couples to eliminate debt as part of the equitable distribution of assets. If you have enough assets to cover your overall debt, you may be able to sell them to pay off the debt so you can both have a fresh start after the divorce. If neither of you want to keep the marital home, for instance, you can sell it and pay off the mortgage. If you have an investment account, you can cash it in and use the proceeds to pay off your credit card debt.
Effect on Creditors
Contract law supersedes divorce law when it comes to marital debts. If the judge orders your spouse to contribute 60 percent to each debt payment, or if he assigns 60 percent of the total marital debt to your spouse for payment, this doesn't mean those creditors can't come after you if your ex-spouse defaults. This applies only to accounts bearing both your names. If you jointly signed for a credit card, the creditor can sue you or garnish your wages to try collect from you if your spouse doesn't pay. However, if your divorce decree "indemnifies" you from those debts, you can take your spouse back to divorce court for reimbursement of any money you lost for debts assigned to him.
Beverly Bird has been writing professionally since 1983. She is the author of several novels including the bestselling "Comes the Rain" and "With Every Breath." Bird also has extensive experience as a paralegal, primarily in the areas of divorce and family law, bankruptcy and estate law. She covers many legal topics in her articles.