How Debt is Divided in Divorce

Latrice Knighton is a member of the Sterling Law Offices partner team and an award-winning divorce attorney, life coach, and speaker. She helps clients resolve their problems by using legal techniques and smart tactics learned through decades of experience as well as helping clients by offering the best practical advice.

by | Dec 6, 2018

When people file for divorce, their first thought is frequently about their assets. However, debts are just as important since they also factor into a couple's net worth.

Just as far as there has to be a division in property in a divorce, there also has to be a division of debt. Make sure that you understand all of what the debts are and have an idea on how you would like to divide them. The court typically will indicate which party is responsible for paying which bills when dividing property and other assets. Generally, the court tries to divide assets and debts equally; however, assets and debts can also be used to equal each other out in value.

Sometimes, people cannot pay back the debts that they were assigned during the marriage. For those of you who need it, read on.

How is debt divided?

Wisconsin’s property division is governed by statute (Wisconsin Legislature: 767.61 Property Division) that says that the court shall divide the property of the parties.

What happens if you can not agree on how to divide the debt?

If you cannot agree on debt division, then the court will generally consider several factors in dividing debt obligations.

What are the factors in debt division?

  • Who made the original debt?
  • For what purpose was the debt made?
  • Who received the benefit of the debt proceeds?
  • Who will receive the particular asset(s) connected with the debt?
  • Who is able to better pay for the debt?


  • If one party does not pay a joint debt assigned to them, the other party can be sued.
  • Try to find ways to pay off joint debts

What do I do if we have joint credit cards?

Since both parties can be liable if one person misses a payment, the only way to protect yourself is to cancel the credit card and, if possible, refinance the credit card.

What if there is disagreement on when to close the credit card?

  1. Can close through a court order if a disagreement. Orders are effective parties, but do not bind the creditor.
  2. Then, notify the credit card company directly by certified mail, return receipt required, that you wish to close the account.

What happens if the other party is considering bankruptcy?

You need to discuss this with your attorney in order to take steps to try to protect you in the event that it happens. The reason for this is that the bankruptcy causes something called a “stay” which holds the divorce proceedings because all assets and debt must be divided during the divorce process.

References: Wisconsin Legislature: 767.61 Property Division


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