One of the most contentious and often difficult parts of the divorce process is the division of the spouses’ marital debts. The spouses may be able to agree on how the debts will be divided—but often they cannot, and the court must determine how the debts will be divided—and sometimes the court will order certain assets be sold to facilitate the payment of the debts.

If the spouses live in a community property state (as opposed to an equitable distribution state), and if a debt was acquired by one spouse before the marriage, it will generally remain that spouse’s separate debt and obligation. But if the debt was acquired during the marriage it is a community debt and both spouses are responsible for it—at least in the eyes of the divorce court. Community property states generally include Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

In other states—so-called equitable distribution or common law property states—the court attempts to divide the spouses’ debts equitably (fairly) and may order one spouse to use separate property to pay the debts, or may order marital property sold to pay the debts, and award one spouse more of the remaining marital property.

In practice, the difference between the division of debts in community property states and in equitable distribution states is sometimes not as great as it may seem, as the court in a community property state may have the discretion to divide the spouses’ community property and community debts on a 60-40, 70-30, or other unequal basis.

When evaluating the division of debts, it is also important to consider any tax implications for the division of the debts—such as the mortgage interest deduction on the spouses’ home—and the impact on a spouse’s credit when the other spouse is given a debt obligation in the divorce, but fails to pay the debt. Unless the creditor in such a situation has agreed to look only to the spouse given the debt, the creditor may pursue the other spouse for payment of a defaulted debt.

In New Hampshire, which is an equitable distribution state, marital debts are divided fairly but not necessarily equally during a divorce. The court considers various factors to determine an equitable division of debt, which may include the duration of the marriage, the economic circumstances of each spouse, and the behavior of the spouses during the marriage. Debts acquired before the marriage typically remain the responsibility of the individual who incurred them, while those acquired during the marriage are subject to division based on what the court deems fair. The court may order the sale of assets to pay off debts or assign more debt to one spouse while compensating the other with more assets. It's important to note that even if a divorce decree assigns debt to one spouse, creditors may still pursue both spouses if the debt was jointly incurred. Tax implications and credit impact are also important considerations in the division of debts. New Hampshire is not a community property state, so the community property rules described do not apply.