When people think about divorce, they often focus on the home, retirement accounts, bank accounts, and other assets. But there is another important part of the financial picture that must be addressed: debt.

In Massachusetts divorce cases, determining who is responsible for debts can become complicated. Credit cards, personal loans, medical bills, mortgages, student loans, and joint accounts may all require careful consideration during the divorce process.

At Lamb and Lamb, P.C. in Salem, Massachusetts, we help individuals understand how financial obligations may be addressed as part of their divorce and how decisions made during the process can affect their financial future.

Is Debt Automatically Divided in Half?

Not necessarily. Massachusetts does not simply require every marital debt to be divided equally between spouses.

Instead, the court considers the overall financial circumstances of the marriage when dividing marital assets and liabilities. Factors can include how and when the debt was incurred, what the debt was used for, each spouse's financial circumstances, and other factors relevant to the equitable division of property.

The goal is generally an equitable, or fair, division—not necessarily an exactly equal one.

What Happens to Credit Card Debt?

Credit card debt can be particularly complicated, especially when an account is held jointly.

A divorce agreement or court order may assign responsibility for a particular balance to one spouse. However, that does not automatically change the contract between the borrowers and the credit card company.

For example, if both spouses are legally responsible for a joint credit card, an agreement requiring one spouse to make all future payments may not prevent the creditor from pursuing the other spouse if payments are missed.

For this reason, joint credit accounts should be reviewed carefully during divorce.

What About Personal Loans?

Personal loans can also raise questions about responsibility.

A loan taken out during the marriage may be considered when determining the division of marital liabilities, depending on the circumstances. The purpose of the loan, whose name appears on the loan, when it was obtained, and how the money was used may all be relevant.

As with other debts, it is important to distinguish between what a divorce agreement requires a spouse to pay and what the lender can legally enforce under the original loan contract.

How Is Medical Debt Handled?

Medical debt can be another source of disagreement during divorce.

Whether medical expenses are treated as an individual or marital obligation can depend on the circumstances surrounding the debt. For example, the timing of the expense, whose medical care generated the bill, and whether the debt was incurred before or during the marriage may be relevant.

If significant medical debt exists, it should be identified and addressed as part of the overall financial analysis rather than overlooked during property division.

What Happens to the Mortgage?

For many couples, the mortgage is one of the largest financial obligations involved in a divorce.

If one spouse plans to keep the marital home, several issues may need to be addressed. These can include:

• Who will make the mortgage payments?

• Will the home be refinanced?

• Can one spouse qualify for a new mortgage independently?

• How will the home's equity be divided?

• How will the other spouse be removed from the mortgage obligation?

• What happens if refinancing is not possible?

Simply transferring ownership of the home does not necessarily remove a spouse from the mortgage loan. The lender's requirements must also be considered.

What About Student Loans?

Student loans can require special consideration because the circumstances surrounding the debt can vary significantly.

Questions may include when the loans were incurred, whether they were obtained before or during the marriage, how the funds were used, and whether both spouses have any legal responsibility for the debt.

Student loans should therefore be evaluated individually rather than assuming they will automatically be treated the same way as credit cards or other marital obligations.

Joint Accounts Require Special Attention

One of the most important things to understand about divorce-related debt is the difference between a divorce order and a creditor's contract.

A divorce judgment or separation agreement can establish which spouse is responsible for paying a debt. But if both spouses remain legally obligated to a creditor, the creditor may still have rights against either borrower.

Whenever possible, spouses should discuss whether joint accounts can be closed, refinanced, transferred, or otherwise resolved so that financial ties can be reduced after the divorce.

Know Your Debts Before Signing a Divorce Agreement

Before finalizing a divorce, it is important to have a complete picture of the family's financial obligations. That means identifying outstanding balances, determining whose name appears on each account, reviewing joint accounts, and understanding how each debt may affect the overall division of property.

A seemingly simple agreement to have one spouse "take the debt" may have consequences if the other spouse remains legally liable to the lender.

At Lamb and Lamb, P.C. in Salem, Massachusetts, we understand that divorce is not only an emotional transition—it can have significant long-term financial consequences. We help clients evaluate the division of assets and liabilities and work toward agreements that address their individual circumstances.

If you are considering divorce or are already involved in a Massachusetts divorce, understanding your debts before making financial decisions can help you move forward with greater confidence.

Contact Lamb and Lamb, P.C. at (978) 744-8818 to schedule a free consultation.