The starting point for divorce negotiations is to divide debt 50/50. This would not include debt racked up because of an addiction, gambling disorder, fancy dinners with a paramour. So the presumption that debt is joint can be questioned, depending on what the debt arose from. Lost a week’s pay gambling? That debt is yours. Dental bills and groceries? You’re sharing that.
Generally, mortgages stay with the house. A spouse gets the house, they would also get the mortgage. If the couple is selling the house, they pay off the mortgage and then split the remaining proceeds of the sale – equally, most often.
Responsibility for debt: Technically, credit cards are held by one person. Even if you are a cardholder on the account, the bills are only in your name, and you are the one that the credit card company will go after. However, if you are getting divorced, then the courts would have the authority to distribute the responsibility as they see fit.
To protect yourself, you and your partner can enter into a prenuptial or postnuptial agreement to clarify that debt in your name is yours, and theirs is theirs. Or you could say (in a prenup) that you will divide debt accrued during the marriage proportionally based on your incomes. (So if one partner earned $100k and the other earned $50k, the debt would be divided 2/3 – 1/3.)
The #1 thing I recommend is – know what’s going on in your household! Look at the monthly statement – forward it to your ex, after circling all the things you expect them to chip in for.
If credit card debt starts accruing, it’s hard to get out from under it, because the interest they charge is so high. You might have a chance to change it, restructure it – move it to 0% interest offers to keep interest charges from piling up – find a debt restructuring company, which will negotiate with your creditors, lower the balance owed and put you on a payment plan.
If you have retirement assets, maybe you can take a loan against them to pay off credit card debt. Those loans are great – you pay interest to yourself.
You can nip it in the bud – but only if you know about it. Some of the worst debt-divorce stories I have seen were where one partner accumulated debt that the other did not know about. Nothing like thinking, “great we’re selling our house for $1,300,000,” only to discover that your share will be $200,000 because there is debt that you only learned about at the closing.
You can also protect yourself with a postnuptial agreement. I worked with a couple whose only area of conflict was money, and they were debating whether to stay married. We negotiated the terms of a postnuptial agreement in which they agreed that any debt would belong to the person whose name is on the debt – and would belong solely to that spouse. Even if you’re already married, you can negotiate who will own what. Just be sure to put it in writing.