How Do Courts Handle the Division of Debts?

Marital debts are handled differently in Maryland than marital assets, the court will only deal with something that is a by legal definition a marital debt. The court cannot order one or the other party to pay off a debt that’s not a marital debt.

The narrow definition of marital debt is a debt that is tied to or secured by a marital asset, such as a mortgage tied to the family home, a car that the family uses, or family use personal property. Those types of things are marital debts. The court can allocate those debts appropriately, according to equity or what’s fair in the case. For example, they can award the family home to one party, as well as order that party to pay the mortgage since they are staying in the house.

Other types of debts, like credit card debts, are not automatically marital debt. Credit card debt is the debt of whoever’s name is on the credit card. There are arguments to be made in certain situations that credit cards or other types of debt could be marital, but it depends on the facts of the case. You should speak with a lawyer to identify if there’s a case to be made for dividing or assigning a certain debt to the other party if it’s not clearly attached to a marital asset. The court can consider the debt when making decisions about how to divide property and make monetary awards. But, generally, if one party has accrued credit card debt and their name is the only name on the account, the court can’t order the other party to pay that debt.

The court can consider that debt when making decisions about Equitably dividing marital assets, but it’s not a direct one-to-one relationship. It’s just a factor for the court to consider. For example, one party has $50,000 of credit card debt and the other party has none. The court is not going to allocate that debt be paid by the other party, that responsibility is just based on the credit card contract. The court could consider that debt when making a monetary award and perhaps award more to the person with the debt than they would have if there had been no debt.

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