Dividing debt in a divorce can be as much of a challenge as splitting assets. Each spouse may take responsibility for different types of debt, depending on how and when they acquired it. Understanding Ohio’s approach to debt division helps you prepare for what lies ahead.
Marital vs. separate debt
Ohio separates debt into two categories: marital and separate. Marital debt includes any liabilities spouses take on during the marriage, regardless of whose name is on the account. This includes credit card balances, mortgages, car loans, and medical bills. Separate debt consists of obligations one spouse had before the marriage or debts they took on through inheritance or gifts.
Equitable distribution of debt
States follow the principle of equitable distribution, meaning debts get divided fairly but not necessarily equally. The court considers factors like each spouse’s income, contributions to the marriage, and financial needs. If one spouse benefits more from a particular debt, they might take on a larger portion of it. Courts also evaluate whether a spouse recklessly accumulated debt without the other’s consent.
Responsibility for joint accounts
Joint accounts remain a key concern during divorce. Even if a court assigns responsibility for a debt to one spouse, creditors can still pursue both parties if the loan or credit card is in both names. To prevent financial issues, spouses should work to close or refinance joint accounts before finalizing the divorce.
Handling secured vs. unsecured debt
Secured debts, such as mortgages and car loans, connect to an asset. The spouse keeping the property typically takes on responsibility for the related debt. Unsecured debts, like credit cards or personal loans, may be split based on fairness rather than strict ownership.
Planning for financial stability
Addressing debt division early helps prevent financial surprises. Monitoring credit reports and negotiating repayment terms protect both spouses from future liabilities. Creating a clear plan for debt responsibility ensures a smoother transition post-divorce.
