The debt you incurred as a couple (marital debt) is subject to division when you part ways. Such debts may include your house mortgage, joint credit cards, business loans and other financial obligations you co-signed alongside your spouse.
In Colorado, marital debt is divided equitably, just like marital property. As such, the portion of the debt assigned to you may not equal your spouse’s. Equitable distribution seeks to achieve a fair and just allocation of marital debt based on several factors, as discussed below.
Factors that may affect the division of marital debt
When apportioning marital debt, the court will look at various aspects of the marriage and the individual circumstances of each spouse. Some of the factors that may weigh in include:
- The value of the marital property given to each spouse
- The economic circumstances of each spouse after the property division
- Any increase or decrease in the value of the separate property of each spouse during the marriage or if a spouse’s separate property has been depleted for marital purposes
- Each spouse’s contribution to the acquisition of marital property and debt (financial or non-financial)
The court may also consider the circumstances in which a debt was incurred before assigning each spouse their share. For instance, debts acquired in bad faith may not be subject to division.
Protecting your financial interests after divorce
Remember, the court’s judgment does not release you from any contractual obligations you had with a lender. You are still answerable to a joint debt even after the court assigns it to your spouse, and creditors can come after you if the debt remains unpaid. Therefore, it is best to reach out for assistance in dealing with such a situation and protect your financial interests.