When an Ohio couple divorces, the court must divide both property and shared debt. For many Fairfield couples, mortgages, vehicle loans and credit card balances can create as much conflict as the assets themselves.
Distinguishing between marital and separate debt
Ohio courts sort debt by looking at when it arose and the circumstances around it. Debt that built up during the marriage often falls into the marital category, while debt from before the marriage often remains separate.
Ohio follows equitable distribution. That means the court divides shared obligations in a way that is fair, not necessarily equal. Records showing when a balance arose and how a spouse used the money can help support that spouse’s position.
Factors affecting equitable distribution in Ohio
Among many factors, courts may consider:
- The income and earning capacity of each spouse
- The purpose of the debt and who primarily benefited from it
- The portion of marital assets assigned to each spouse
- The waste or dissipation of marital funds by one spouse
- The total assets and liabilities of the marital estate
This is not a complete list. A court may place more debt on the higher-earning or higher-asset spouse if that creates a fairer overall result. Account statements, loan papers and tax returns can help show when the obligation arose, who benefited and why the court should place it in the marital column. A plain-language guide to marital debt can give added context for that review.
A divorce decree does not change what the lender can do
The original loan or credit agreement with a lender does not change with a divorce decree. If both spouses signed for a joint account, the creditor may still pursue either of them for payment.
In many family law disputes involving shared finances, that creditor issue can remain important even after the court divides debt between the spouses. Closing or refinancing shared debt before the court enters the decree can reduce the chance that one spouse will face liability for debt the court assigned to the other.