Arizona Divorce Debt | Hildebrand Law, PC

Arizona is one of nine states in the nation that is considered a community property state when it comes to Arizona divorce debt.

This means that almost all property (both assets and debts) that are acquired during the time of a couple’s marriage will be legally recognized as community property and/or debt.

What is the difference between community and separate debt? How is community debt actually divided? How do you enforce an order dividing debt in an Arizona divorce decree? We are going to address those questions and more.

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The Difference Between Community Debts and Separate Debts in Arizona

Arizona divorce debts are generally those debts incurred during the marriage or for the benefit of a community asset. Community debt is recognized as the liability of both parties equally.

Separate debts are generally all debts incurred by either spouse prior to marriage or after service of the Petition for Dissolution of Marriage has occurred. Separate debt is recognized as the separate debt of only one of the spouses.

Determining which debts are the community debts and which debts are separate is important in approaching the division of those debts, as well as the division of marital property.

After determining which debts are community property, the Court will determine how to equitably divide those debts between the parties, which is typically to divide community debt equally between the parties.

Separate debts are assigned solely to the spouse accruing that separate debt.

How is Community Debt Divided

One of the riskier aspects of the division of marital property concerns the division of Arizona divorce debt.

In a perfect world, we would all have the funds available to pay off all of our debts, so we could start off post-divorce with a clean slate. This is not the case for most people.

Although a court has the authority to divide community debt between the parties, the court does not have the authority to order either party to pay off the debt by a lump sum payment.

This leaves the other party potential liable to the creditor who may come after him or her if his or her former spouse stops making payments as ordered.

It is important, therefore, to understand some strategies to consider when dividing community debt in an Arizona divorce.

One strategy is to have each party responsible for the debts in his or her sole name, such that a wife would take all credit cards in her sole name and a husband would take all debts in his sole name. Any difference in the debt balances could be resolved in a couple of ways.

One option is to award the spouse with a larger amount of the community debt with a larger portion of the community assets in such amount as would equalize the division of community debt.

If it appears the other spouse either has no ability to pay the debts assigned to him or her or it is proven he or she will simply refuse to pay any debts assigned to him or her, you may ask the court to assign all the debt to the responsible spouse and then equalize that inequality by giving him or her the same amount of community assets as he or she is assuming in debts with additional assets being equally divided between the parties.

How To Enforce a Division of Debt in an Arizona Decree

Regardless of what orders the court enters regarding the responsibility for the Arizona divorce debt, both spouses are still legally liable for those community debts.

Stated differently, a creditor is not bound by the court’s order regarding who is responsible for the debt because the creditor was not a party to the divorce case and, therefore, any court orders in the divorce case cannot be imposed upon a creditor who was not a party to that divorce.

If a former spouse fails to pay a debt assigned to him or her, you will need to enforce the court’s order to pay the debt as ordered.

In order to do so, the innocent spouse would have to pay the debt his or her spouse was ordered to pay and then seek a money judgment from the court against his or her former spouse for the amount paid to the creditor.

The Arizona Supreme Court in the case of Proffit v. Proffit ruled that a person cannot be incarcerated after being held in contempt for his or her failure to pay a community debt because doing so would violate the constitutional prohibition against imprisonment for not paying debts.

The Proffit v. Proffit Ruling Explained

Talk to One of Our Family Law Attorneys About Your Arizona Divorce Debt

If you need help deciphering the laws pertaining to community and separate debt, please get in touch with Hildebrand Law, PC. We would love to go over the related issues with you and aid you in protecting yourself from debt in an Arizona divorce. To learn more about how to protect your rights during your divorce, get in touch with our Arizona divorce attorneys. We are available to assist you immediately.

If you have questions about divorce debt in Arizona, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona divorce and family law attorneys have decades of combined experience successfully representing clients in divorce and family law cases.

Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.

Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your divorce or family law case around today.

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Frequently Asked Questions About Divorce Debt in Arizona:

Is a wife responsible for husband’s debt in Arizona?

Each spouse is responsible to creditors for all community debt even after the court orders the division of community debt in a divorce in Arizona.

How is debt handled in a divorce in Arizona?

Each spouse is assigned his or her separate debts and community debt is equitably divided between the spouses; which usually results in an equal division of that community debt.

Can a creditor come after me for my ex spouse’s debts?

A creditor can come after you for your former spouse’s debts if those debts were incurred during your marriage regardless whether you applied for the debt or not.

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