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What Happens to Debt in a Divorce?

Pennsylvania is an equitable distribution state, which means that assets are divided fairly for both parties in a divorce. It is important to note that the division is not necessarily even. Owing to this, many divorcing couples may wonder how marital debt will be handled. Much of this depends on whose name is on each debt and if it was acquired before or during the marriage.

Dividing debt is not always clear-cut because it can be commingled. For example, many people will have credit cards in their name before they get married. However, if they used that credit card to purchase items for both parties, such as furniture, it may be transformed into marital property. Commingling debt is fairly common and must be considered in divorce proceedings.

What are Common Forms of Debt?

Deciding what is marital property can be complicated because there are many different forms of debt. Spouses should take time to review all of their debts and how they can be affected by a divorce. Some common types of debt are listed below.

Credit cards: In many cases, each spouse will have received multiple credit cards prior to the marriage. A lot of couples also jointly purchase credit cards. Preferably, the primary debtor or the account owner will pay off the debt. However, this is not always the case because one spouse usually does not have incentive to pay off the credit card debt after divorce. One party will have their credit affected, but the other may not.

Mortgage: Most couples still have mortgages to pay. Therefore, it will have to be determined who is responsible for the payments after the divorce.

The spouse who was awarded the property will take on the mortgage. If both spouses are on the mortgage, the party who was not awarded the property signs a Special Warranty Deed. This assigns interest to the other spouse. The spouse responsible for the property then signs a Deed of Trust to Secure Assumption agreement to keep up with the mortgage. If they do not pay the mortgage, the beneficiary listed on the Deed of Trust to Secure Assumption can pay the balance or foreclose the property.

Auto loan: An auto loan is a secure debt, which means that the person responsible for that property is accountable to make payments. Sometimes, the loan is in one spouse’s name, but the other party possess the car. The party who has the car can refinance the auto loan with their name.

Auto loans in a divorce are difficult because the spouse responsible for the payments may not continue to make them if they do not have possession of the vehicle. If the other spouse is a cosigner or is on the loan, they may be responsible for full payments.

What Should I Do if Debt is Involved in My Divorce?

Although divvying up debt is complex, both parties have options available to them. Some ways to dissolve debt include the following:

  • Bankruptcy: Bankruptcy is an option because it will eliminate the debt; however, there are many factors to consider when deciding whether this is the best option. Bankruptcy can affect both spouses, and it greatly impacts credit. It can also delay divorce proceedings.
  • Remove name: A person can request loan companies to remove their name because of the change in income and the divorce. However, this is unlikely. Most lenders will not remove a name since the loan was approved because of both spouses’ income and credit card histories.
  • Pay off debt: Ideally, all debt should be paid before the divorce is finalized. This will eliminate most related problems. However, many forms of debt are high and cannot be paid off quickly.
  • Mediation: A divorcing couple can go through mediation to discuss the distribution of assets and debt. This can minimize legal fees and solve matters quicker. An attorney can advise their client throughout the mediation and divorce process.

Delaware County Family Law Attorneys at the Law Office of Deborah M. Truscello Help Spouses Divide Assets and Debt in Divorce

Solving divorce problems is often complicated, especially if substantial amounts of debt are involved. If you need help with your divorce, speak to a Delaware County family law attorney at the Law Office of Deborah M. Truscello. Call us at (610) 892-4940 or contact us online for a free consultation. Located in Media, Pennsylvania, we serve clients throughout Bucks County, Chester County, Delaware County, Lancaster, Montgomery County, Norristown, Philadelphia, Reading, and West Chester.

Contact the Law Office of Deborah M. Truscello

To discuss your case in a free, confidential consultation with attorney Deborah M. Truscello, Esq., call or fill out the form below. 

From our office located in Media, PA we serve the surrounding areas of

  • Bucks County
  • Chester County
  • Delaware County
  • Montgomery County
  • Philadelphia County
Including but not limited to
  • Allentown
  • Lancaster
  • Reading
  • West Chester

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Reasonable Rates & Fees

For Personal Injury, Workers’ Compensation and Social Security Disability cases, we have a contingency fee based on a percentage of what we obtain for you. We will not charge you any fee unless and until we settle your case, prevent the loss of your benefits or obtain benefits for you. 

For Family Law clients, we understand that financial difficulties often accompany divorce and other family law issues. Ask us about our reasonable and competitive hourly rates for your situation. 

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Why Clients Choose Deborah

Heather A
I have known Deb for years now and it all started in 2009 when I got hurt and needed legal help with my workers comp. I randomly chose Deb because of the things I read on her website and I liked that she had a take charge attitude about just about everything. She out-lawyered someone and got me more in a settlement for that and then also worked with me on another case and won that one as well for me. If you get to know Deb and her personal story, you will get to know an amazing single mom who has had her own struggles and has come out so much stronger. She will fight for you if you do your part as a client and follow her guidance. I have now used two women lawyers in Media and three men and I actually found the two women far more effective and both won my cases that the men lost. Without Deb and my other lawyer winning the cases for me that they did - I could have found myself disabled for good with no money to pay for the life I live because I can’t work now. I credit my ability to be able to eat and have transportation and all. I couldn’t be more grateful for their hard work they did for me. Deb has won two of my cases and I would absolutely refer others to her for the same kinds of cases and I would use her again if I ever needed her help again!
Daveen Carpenter
Deborah's team went above and beyond to get my case settled quickly. I am forever grateful
Rebecca Porter
If you ever need a worker’s compensation attorney, I highly suggest using Deborah Truscello. I had a work accident injury and was referred to Deborah. She was with me every step of the way, with this long-drawn-out process. She was there any time I had questions or needed advice on my rehabilitation. Now my case is settled. I am very happy how things turned out and I owe it all to her. I can't thank her enough. I will use her again if I ever need too.
Jackson Jones
Deborah is an excellent lawyer. She was professional, knowledgeable, and made me and my case feel important. She was always accessible and answered all of my questions. I would definitely recommend Debbie to anyone injured at work and in need of legal services.
I am a client of Deborah Truscello and also a woman of color. Deborah Truscello is not a bigot nor is she a racist. I hired Ms. Truscello back in 2016 for a very nasty custody case against a crazy man who has a history of dragging all his children through the court system. Ms. Truscello has been nothing but professional and well organized. She is very reliable and always available. I could contact her any time of the day or night and she is always responsive to my text messages, calls, and emails. If you are considering hiring her as your attorney I highly recommend you schedule a consultation and see for yourself you will not be disappointed.
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Amazing law firm, they have helped me so much and enlightened me to the options I have, and to the right doctors who are still treating my issues... Very professional and very great people glad to have her in my team!!

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