Who is Responsible for Debt after Divorce? | Bandle & Zaeske (2024)

Most folks know that in the divorce process, the couples’ assets will be divided between the two spouses. But did you know that, in the Badger state, if you and your spouse divorce, your debt is divided, too? In the state of Wisconsin, which is a community property state, the spouses debts are shared by both spouses, with few exceptions. If you are considering filing for divorce, it is best to first consider what debt you may now inherit.

Wisconsin is a “community property” state

Wisconsin is one of a few states with “community property” rules. Our State calls it “marital property.” What does that mean? In states that follow community property law, marital property is considered owned by both spouses equally. This includes all earnings — salary, retirement accounts, capital gains, interest income, stock dividends — all property purchased with those earnings, and all debts that are amassed during the marriage. It does not matter when the property was obtained, or the debt was accumulated.

Debt is community property

In community property states such as Wisconsin, debts acquired during the marriage by either spouse are owed by the couple. This is the case even if only one spouse signed the dotted line on any paperwork for a loan, credit card, or other debt. If you or your spouse had a credit card from when they were single, for example, that loan will automatically become join debt. There are exceptions, and sometimes judges will vary the division where substantial debt was incurred before the marriage, but that is a complex issue, depending on the specific facts of your case.

Responsibility for debt after divorce

In Wisconsin, spouses are jointly responsible for all debts, regardless of whose name is listed on the loan. In adivorce, the spouses can agree on who will assume responsibility for debt repayment, or it will be decided by a judge if you cannot agree. The final divorce settlement will specify who bears responsibility for repaying the debt.However, if your name is on any of the debt paperwork — such as a mortgage, car loan, personal loan, or credit card — you are still liable for the debt regardless of what is written in your divorce settlement. Creditors will legally hold you accountable if your name is on the account and can take action should your spouse fail to pay.

Have questions regarding shared debt in a divorce? We can help

If you are considering a divorce, it is best to understand the process, including how your property and debt will be divided under Wisconsin’s community property law. The division of each spouse’s debt is a complex issue, with few simple answers. The Wisconsin family law attorneys atare knowledgeable and experienced in all aspects of Wisconsin divorce law, providing compassionate counsel throughout the divorce process. We are happy to answer any questions you have regarding divorce, and are available to meet with you for a free confidential consultation to discuss your situation. Contact our Milwaukee office at 414-359-142 orcontact us onlineto schedule a confidential consultation to discuss your situation.