What's Considered Marital Debt and What Are Examples of It?

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Marital debt refers to financial obligations incurred during a marriage, such as mortgages and credit cards. Because a marriage is a complex legal partnership, it’s not as easy as looking at the name on a loan or account to determine who is responsible for marital debt. So whether you’re entering a marriage, managing finances with a spouse, or preparing for a divorce, it’s important to know how marital debt works. A financial advisor can offer valuable guidance on handling shared debt, protecting your financial future and strategizing debt division during divorce proceedings.

Marital debt includes any financial obligations acquired during the course of a marriage, regardless of whether the debt is in one spouse’s name or both. The key factor in determining marital debt is whether the debt was accumulated during the marriage and was used for the benefit of the household or both partners. Generally, marital debt can include loans, credit card balances and other financial obligations used to support the couple’s lifestyle, purchase shared assets or cover joint expenses.

Marital debt typically includes different types of liabilities that are incurred during the lifetime of a marriage. Here are eight to keep in mind:

Mortgage loans: If a couple purchases a home during the marriage, the mortgage is generally considered marital debt. Even if only one spouse’s name is on the mortgage, both may still be responsible for it in a divorce. Courts often decide whether the home should be sold, refinanced or assigned to one spouse, with the other receiving compensation for their share.
Credit card debt: It can be difficult to determine who is responsible for credit card debt in a divorce. Generally, household expenses, vacations, or shared purchases are considered marital debt. However, if one spouse racks up excessive debt on personal luxuries without the other’s knowledge, courts may classify it as separate debt.
Car loans: If a vehicle was purchased during the marriage, the associated loan is considered marital debt, even if only one spouse’s name is on the financing agreement. Courts may assign responsibility for the car loan based on who keeps the vehicle post-divorce.
Medical debt: Many states consider medical expenses incurred during a marriage as joint debt, even if only one spouse received treatment. If a couple is divorcing, courts may divide medical debt based on who received treatment, financial circumstances and whether insurance covered part of the costs.
Personal loans and lines of credit: Personal loans taken out during a marriage, such as those for home renovations, major purchases or debt consolidation, are often classified as marital debt. If a loan was used for household expenses or investments that benefited both spouses, it is typically shared in a divorce.
Student loans: The treatment of student loans in a divorce varies. If the loans were taken out before the marriage, they are usually considered separate debt. However, if one spouse incurred student loans during the marriage and the funds contributed to household expenses, courts may classify the debt as partially or entirely marital.
Business debt: If one spouse starts a business during the marriage and takes out loans or credit lines to fund it, the debt may be considered marital, especially if joint assets were used to support the business. However, courts may look at ownership structure, financial involvement, and whether the business benefited the household when deciding debt division.
Tax debt: If a couple files joint tax returns, both spouses may be equally responsible for any tax liability, including unpaid taxes, penalties or interest. In some cases, innocent spouse relief may apply if one spouse was unaware of the other’s financial misconduct.

A couple reviewing their marital debt and overall finances.

When a marriage ends, the division of debt can be as contentious as dividing assets. How marital debt is split depends largely on state laws and individual circumstances. Here are some laws, factors and options to consider.

Community property states: In community property states like California, Texas and Arizona, marital debt is divided equally (50/50) between spouses, regardless of income or who incurred the debt.
Equitable distribution states: In equitable distribution states, debt is divided fairly but not necessarily equally, meaning courts consider factors such as income, financial needs and purpose of the debt when determining responsibility.

Who incurred the debt? If one spouse took on excessive debt without the other’s knowledge, courts may assign responsibility to the spender.
Who benefited from the debt? If both spouses benefited (e.g., a home loan, shared credit cards), the debt is likely divided between them.
Financial ability to repay: Courts consider income, assets and earning potential when assigning debt responsibility.
Prenuptial or postnuptial agreements: If a couple signed a legal agreement outlining debt division, courts typically enforce it.

Debt repayment agreements: Some couples negotiate debt division outside of court, agreeing to split or assign debts based on financial capability.
Refinancing loans: If one spouse keeps an asset (e.g., a house, car), they may refinance the loan in their name to remove the other spouse’s responsibility.
Selling assets to pay off debt: In some cases, selling marital assets (e.g., a home) allows couples to settle debts before finalizing the divorce.

A couple discussing marital debt with a financial advisor.

Marital debt is typically made up of financial obligations such as mortgages, credit cards and medical bills taken on during a marriage. The division of this debt in a divorce varies based on state laws and the couple’s financial situation, as well as who benefited from the debt. Consulting a financial advisor can aid in managing marital debt and planning for financial stability post-divorce.

A financial advisor can work with you to help restructure your finances during and after a divorce. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you want to build your savings up consistently, consider setting up automatic transfers from your checking to your savings accounts. This approach could help you make saving a routine part of your financial life.

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