Property division is a common subject of virtually any divorce. But it’s less common to think about the implication of your separation on your debt. Will you inherit your ex-spouse’s debt? Will they inherit yours? What’s on the line, and how are these decisions made?
Community vs. separate debt
The first thing to understand is how the state of Washington defines debt. There are two types of debt: community debt and separate debt.
Community debt refers to any debt that you or your spouse acquired during your marriage. This can refer to debt you acquired together or individually – assuming that the individual debt incurred by one spouse still benefitted both spouses. Separate debt is any debt that one of you acquired either before getting married or after your separation.
The first step is for the court to determine which of your debts (as well as your assets) are community or separate. Then the court will decide how all community debt (and property) should be divided.
What factors are considered?
Washington law requires that debt and property from a divorce be divided in a manner that is “just and equitable.” In practice, this means that the court has a fair amount of flexibility to decide the fairest way to distribute debt. Some factors the court may consider include:
- Duration of the marriage: Is it fair for one spouse to take on their ex-spouse’s student loan debt if the marriage only lasted a couple of years?
- Financial stability: Is one spouse in a significantly better financial situation to take on additional debt?
- Child custody: If one parent will have primary custody of the children, is it fair to award fewer debts to that parent?
- Work prospects: If one spouse has been out of work for several years, they may encounter challenges re-entering the workforce. Is it better to relieve the burden of debt on this spouse?
It is never the aim of the court to leave one spouse well off and the other struggling to make ends meet. In determining what is “just and equitable,” the court is seeking to make decisions that will leave both spouses on more or less equal footing.