How is Debt Divided in a Tennessee Divorce?Americans are amassing a staggering amount of unsecured consumer debt. The average household credit card debit in the U.S. is about $15,706 according to Federal Reserve data. When a couple divorces, in addition to dividing their assets, the debt that they have accumulated during the course of the marriage must be allocated as well.

Although the Tennessee statutes do not define how marital debt will be divided, the Tennessee Supreme Court ruled in 2003 in Alford v. Alford how marital debt will be assigned to the spouse who receives the asset, taking the following factors into consideration:

  • The debt’s purpose
  • Which party incurred the debt
  • Which party benefitted from incurring the debt
  • Which party is best able to repay the debt

Once the court has determined the answers to these questions the debts can be divided appropriately between the two.

The challenge of joint debt after divorce

When you accumulate debts together during the marriage, you are both still liable for that debt in the event of a divorce. If the court assigns a credit card balance to your spouse, but he or she neglects to pay it, you are still liable for the debt and creditors can come after you. But if you do get stuck paying off a debt that was incurred by your former spouse, you can sue your ex for the portion he or she was responsible for.

Once the marriage ends, the joint liability for debt ends and each spouse goes back to incurring their own individual debts. I advise my clients to make sure to leave the marriage with no joint debt. They can pay off the joint cards together, or they can divide the balance and transfer it to cards in each spouse’s name. Be sure to cancel any other existing joint credit cards to make sure that your soon-to-be-ex spouse is not able to go on a spending spree and create additional debt.

At my law office, Kevin W. Shepherd, Attorney at law, I help people just like you get through the divorce process as smoothly and as quickly as possible. With office locations in Maryville and Franklin, I am always nearby when you need me. Please contact me to learn more about my family law services.



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