Are Marital Liabilities and Debts Considered in Division of Property and Alimony?

Ken and Kora are going through a divorce in Massachusetts. Although they were only married for a short time, Ken managed to rack up a substantial credit card debt during the marriage. Ken and Kora both work full-time, but Kora makes significantly less money than Ken. She is worried about the Court’s division of marital property—will the Court saddle her with parts of Ken’s debt?

This is a possible scenario. Typically, the debts incurred by the couple during the marriage are considered marital liabilities, and they will be factored into the Court’s decisions regarding marital property division. The Massachusetts Probate and Family Courts use a process called equitable distribution to divide marital property in general. Here, the term “equitable” means “fair,” and not necessarily equal: the court will determine how best to divide marital property in the fairest manner in each particular case. There are many factors that the Court considers as part of this process.

In addition to assets, the parties’ liabilities are also considered. As some examples, the courts have considered tax liabilities, student loans, and bank loans owed by one or both parties. Debts are examined by the courts not only regarding responsibility for payment of those liabilities, but also regarding whether they will have any effect on the equitable division of proceeds and grating of alimony. For instance, the courts may find that, although both parties have their own debts, because one party makes significantly more than the other, it would be unfair to burden the other party with some or all of the liabilities incurred during the marriage.

The Court will take into consideration many factors and questions in regards to the parties’ debts and liabilities. For example:

  • Did one or both parties accumulate the debt? Did either party object to the prospect of accumulating this debt?
  • Was the debt incurred before or after the marriage took place? Was it incurred after separation, or even in contemplation of divorce?
  • Was the debt incurred for the benefit of both spouses, or only one? Was it incurred for the benefit of the family?

Of course, in cases where one party profligates and incurs debt (particularly debts which were the result of significant unreasonable spending or mismanagement of finances), the Court may order that party to settle his or her own debts, rather than assigning the debt to both parties as part of the marital assignment. For example, in one case, the Court noted that the couple’s debt was largely due to the husband’s financial mismanagement and living beyond his means. The Court held that a fifty-fifty split of liabilities and assets was not necessary. [1]

If you have any questions about division of marital property, you may schedule a free consultation with our office. Call 978-225-9030 during regular business hours or complete a contact form here, and we will get back to you at our earliest opportunity.

[1] Duckett v. Duckett, 27 Mass. App. Ct. 1164 (1989).