Those considering divorce often focus on how the Louisiana family courts will split their assets while likely ignoring the debts that they accrued throughout their marriages. Your marital debts can play a major role in the asset division process for divorce.
Despite what misinformation you may have heard from other people, you don’t get a free pass on debts amassed during your marriage just because your spouse’s name is on the credit card and not yours. Instead, the intention behind incurring the debt and the date that the debt originated will guide the courts in how to handle marital debt in a divorce.
Community property standards apply to debt, not just assets
Louisiana uses the community property standard that recognizes income earned and assets accrued during the marriage as a jointly owned by both spouses. The same standard applies to debt accrued throughout the course of the marriage, even if the debt is only in the name of one spouse.
However, existing debt from before the marriage will likely remain the separate property of the spouse who incurred those expenses. With few exceptions, your credit card balances and potentially even student loans from during the marriage could wind up the responsibility of both parties, provided the debt was the result of attempts to better your family’s situation.
Only debts related to dissipation won’t impact asset division
It can feel very frustrating to know that you will have to help pay off credit card debt that your ex accrued. In some cases, the debt you pay off may have been used to purchase items for the household or just for one spouse.
Only in circumstances where one spouse can show that the debt stems from intentional dissipation can they avoid partial responsibility for that debt. For example, if your ex usually didn’t charge much on credit but went out and accrued $10,000 worth of credit card debt in a single weekend after they got served with divorce papers, you may be able to claim dissipation. The reason is that they may have acted with the intent to diminish the value of the marital estate.
Similarly, debts that your ex racks up that only benefited them, especially if they stem from an extramarital affair, could also wind up separated from the community property pool, thereby protecting you from any obligation to repay them. In most other situations, even if the financed item was a gift your spouse gave you, you will likely have partial, shared responsibility to repay the full balance of those debts.