How is debt dealt with when people divorce?

Divorce can be an uncertain time financially and if a couple have debts, it can make the situation even more difficult.

Many couples find that they have a number of debts when they separate or divorce, including car loans, a mortgage and money owed on credit cards. Separating debt as far as possible will help you have more financial certainty going forward.

Who is responsible for debts on divorce?

If a debt is held in joint names, then both parties are responsible for it. Where the money was spent during the marriage on something that both parties undertook, such as home improvements or a holiday, the court will generally consider the liability to be a joint responsibility irrespective of whose name the debt is in.

Where a debt was run up by one party on items for their own use and enjoyment only or where a party brought significant debt to the marriage, this is likely to be considered their debt and not a matrimonial debt. However, the court has limited powers when it comes to debts and cannot order either party to pay a debt off or transfer a debt. It does have the power to order one party to make payments to the other and can also declare one party to be responsible for a debt.

Dealing with a mortgage on divorce

The situation regarding a mortgage is slightly different as the court can order that interest in a property be transferred into one party’s name. It can require an undertaking from the other party to meet the mortgage payments.

An application can be made to the mortgage company to remortgage the property so that only one name is on the mortgage, but this will be dependent upon the party who wishes to take on the mortgage showing the lender that they have sufficient funds to meet the monthly payments.

The court cannot make an order requiring one party to take on the mortgage debt alone and where a mortgage is held in joint names, the lender will be able to pursue either or both parties for unpaid instalments. In some cases, the court might order that the property is sold and specify how the sale proceeds are to be split. Where there are children involved however, their main carer is often allowed to stay in the matrimonial home and sale deferred until the youngest child reaches 18.

Reaching a financial agreement in divorce

As part of the divorce process, you will need to have a financial settlement put in place. If you do not do this, it will remain open to your former partner to make a claim against you long into the future.

It is generally better to try and reach an agreement over finances without going to court. Your solicitor will be able to negotiate on your behalf and where you cannot come to an agreement, you can go to a mediator who will try and help you both to find an acceptable solution.

If you can agree a financial arrangement, this can be put before the court for sealing into a legally binding consent order. This means that you will be able to rely on it and, if necessary, enforce it.

If you would like to speak to one of our expert family solicitors, ring us on 0345 241 3100 or email us at

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