Divorce is not just an emotional separation—it’s a financial one too. As you navigate the process, one major concern may be who is responsible for outstanding debt. From student loans to credit cards and taxes, untangling financial obligations can be complex.
How Maryland Law Handles Debt in Divorce
In Maryland, debt responsibility in a divorce depends on two key factors:
- Whose name is on the debt
- When the debt was incurred
Under Maryland divorce law, you are only responsible for your spouse’s debt if:
- You agreed to be personally liable for the debt (e.g., you co-signed a loan)
- The debt was incurred jointly (e.g., a shared credit card)
If the debt is only in your spouse’s name, and you did not agree to be responsible, you are not legally required to pay it off.
Types of Debt & Divorce in Maryland
1. Student Loan Debt
Student loan debt is typically not considered a marital debt in Maryland, unless both spouses co-signed the loan. If your spouse took out student loans before or during the marriage in their name alone, they are solely responsible for repayment. However, if you co-signed or consolidated student debt together, you may be liable.
2. Credit Card Debt
Credit card debt responsibility depends on whose name is on the account:
- Joint credit cards: Both spouses are legally responsible for the balance.
- Individual credit cards: If the card is only in your spouse’s name, you are not responsible—unless you co-signed.
However, if your spouse racked up personal credit card debt during the marriage for marital expenses (e.g., groceries, household bills), the court may consider it when dividing assets or determining a financial award.
3. Tax Debt
Owing back taxes can complicate a divorce, especially if you filed joint tax returns. In Maryland:
- If you filed jointly, both spouses can be held responsible for any unpaid taxes.
- If you filed separately, you are generally only responsible for your own tax liabilities.
- If you suspect your spouse underreported income or committed tax fraud, you may qualify for Innocent Spouse Relief under IRS rules.
4. Co-Signed Loans
If you co-signed a loan (such as a car loan, mortgage, or personal loan), you are legally responsible for the debt—even if your spouse was the primary borrower. A divorce decree may assign responsibility for the debt, but it does not remove your name from the loan. If your spouse stops paying, lenders can still come after you.
What About Marital Debt?
If the debt is tied to a marital asset (e.g., a mortgage on the marital home, a car loan), it is considered marital debt, and the court does have jurisdiction over it. In these cases, the court can determine how the debt is divided.
However, if the debt is not tied to a marital asset (such as personal credit card debt or student loans), the court cannot reallocate the debt. Instead, the court may issue a monetary award, requiring one spouse to compensate the other to help balance financial responsibilities.
How to Protect Yourself
- Review Your Accounts: Pull your credit report to see which debts are in your name.
- Negotiate in Your Settlement: Address debt division in a marital settlement agreement.
- Remove Your Name from Joint Accounts: Close or refinance shared debts if possible.
- Consult an Attorney: Maryland divorce laws are complex, and legal guidance is essential in protecting your financial future.
Navigating debt during a divorce can feel overwhelming, but understanding Maryland law and taking proactive steps can help you move forward with financial clarity and peace of mind.
Need legal advice on debt and divorce? Speak with an experienced Maryland divorce attorney to ensure your financial rights are protected. Complete our Intake Form to get started!