Debts incurred during marriage for family purposes are typically marital regardless of whose name appears. Allocation between spouses does not bind creditors, who may pursue whoever is contractually liable.
Debts for non-marital purposes may be separate.
Alternative Names:
Marital Liabilities|Community Debt
Why it Matters?
Allocation does not bind creditors, which is the most consequential principle, since a spouse assigned a debt in the decree remains liable to the lender if their name is on the account and the other spouse's default leaves them exposed. Refinancing to remove a party or indemnification provisions with enforcement mechanics are the responses. Joint credit accounts should be closed at separation rather than at decree.
Frequently Confused with
Related terms
Frequently asked questions
Does allocation bind creditors?
What responses address that?
