Deciding how marital debt will be resolved is a sensitive topic in divorce negotiations. You will probably not be surprised to learn that asset division – splitting up the money and the “stuff” accumulated during the marriage – is one of the most conflict-ridden aspects of divorce. It seems like no one ever wants to talk about money, but divorcing couples will fight about money and who gets what in the divorce.

Given that it’s almost a law of nature that spenders and savers seem to be magnetically attracted to one another, there may be one spouse who incurred more debt than the other. Let’s look at ways to manage splitting up the debt in a way that is fair to both parties.

While the Tennessee divorce statutes do not prescribe any specific method for dividing marital debt, nor does it offer a way of distinguishing marital debt form separate debt, the Tennessee Supreme Court did address the issue of dividing debt in divorce in the case of Alford v. Alford in 2003. The court determined that where possible, debt should be assigned to the spouse who received the asset which the debt was incurred to acquire using the Mondelli v. Howard opinion:

1. The debt’s purpose;
2. Which party incurred the debt;
3. Which party benefitted from incurring the debt; and
4. Which party is best able to repay the debt.

For example: if Spouse A decided to attend medical school and graduated with a significant amount of student debt, the Spouse B would not be expected to take on the student debt, which was incurred by Spouse A – and which will only benefit Spouse A from hereon out.

Unfortunately, while divorce ends the marriage, it does not sever the bond of debt that the parties owe and must repay. If one party incurred the debt on a joint account, the other party is equally liable for it. Part of the divorce decree includes a notice on liability to creditors, which states that each party is aware that they are both still liable for any joint debt, regardless of which party is ordered to pay it in the divorce decree.

5 tips for dividing debt in Tennessee divorce

Debt adds a layer of complexity to the divorce process. Working with an experienced Nashville divorce attorney can help make sure that your interests are protected and that you get a divorce agreement that you can live with.

1. Obtain a copy of your credit report and look for joint accounts or accounts in your name only with outstanding balances.
2. Close any joint accounts or freeze the credit on any open joint accounts as part of the divorce agreement.
3. Work out a plan with the other party to pay off any debts for which you are singularly responsible.
4. Negotiate with creditors to see if any balances can be reduced.
5. Consult with your Nashville divorce attorney from Miller Upshaw Family Law, PLLC to develop a plan that protects your credit worthiness going forward.

At Miller Upshaw Family Law, PLLC, we work to ensure that your assets and debts are divided in a way that is best for you. To work with one of our experienced Nashville divorce lawyers, please call 615-391-4200 or contact us to reserve an in-person or video consultation.