Introduction
Divorce in Minnesota doesn’t just mean dividing your assets. It also means figuring out who is responsible for the debts you and your spouse have accumulated. From credit cards and student loans to mortgages and personal loans, debt division is often one of the most contested parts of a divorce.
In this blog, we’ll explain how debt is divided under Minnesota law, the difference between marital and non-marital debt, and how the courts decide who pays what when a marriage ends.
Minnesota’s Approach: Equitable Distribution
Minnesota is an equitable distribution state, which means the court aims to divide marital property — including debts — fairly, though not always equally.
“Equitable” doesn’t mean 50-50. It means what’s fair based on the circumstances of the marriage, each spouse’s financial situation, and their individual contributions during the relationship.
What Counts as Marital Debt in Minnesota?
Just like with property, marital debt refers to any debt incurred by either spouse during the marriage, regardless of whose name is on the account.
Examples of marital debt:
- Joint credit card balances
- Mortgage loans on the marital home
- Car loans for vehicles used by the family
- Medical debt incurred during the marriage
- Personal loans taken out for joint expenses
If the debt was used for the benefit of the household, it is likely considered marital and will be part of the division process.
What Is Non-Marital Debt?
Non-marital debt is debt that one spouse took on before the marriage or individually during the marriage that had nothing to do with the household or joint finances.
Examples include:
- Student loans taken out before the marriage
- Credit card debt tied to personal expenses (e.g., gambling, affairs)
- Debt inherited or gifted in one spouse’s name
If you can prove a debt was not related to the marriage, the court may assign it solely to the person who incurred it.
How Courts Decide Who Pays What
The court considers many factors when deciding how to divide debts fairly, including:
- Length of the marriage
- Each party’s income and future earning potential
- Who benefited from the debt
- Whether the debt was incurred responsibly
- Custody of minor children
- Whether either spouse wasted marital funds
For example, if one spouse used a credit card to pay for household groceries and bills, that debt is more likely to be shared. If one spouse used a card for vacations or luxury items without the other’s knowledge, the court may assign that debt solely to them.
What If the Debt Is in One Spouse’s Name?
In Minnesota, whose name is on the debt doesn’t always matter. If the debt is marital in nature, both spouses may be responsible — even if it was only in one person’s name.
This can be a shock to many divorcing spouses who thought they were safe because their name wasn’t on the credit card or loan agreement.
Mortgages and Car Loans: Who Keeps the Property?
If one spouse is awarded the marital home or a vehicle, they usually also become responsible for the loan attached to it. Courts try to ensure that the person who receives the asset also takes on the corresponding liability.
That said, this can create complications if both spouses’ names are on the loan. In such cases, refinancing may be required to remove one spouse’s liability.
Student Loans in Divorce
Student loans are a hot-button issue in divorce. In general:
- Loans taken before marriage are considered non-marital
- Loans taken during marriage may be considered marital if the couple benefited from the degree (e.g., higher household income)
However, the court may still assign the debt to the person who took the classes, especially if the other spouse did not benefit significantly from the education.
Credit Cards and Divorce
Credit cards can be complicated, especially if they were used for a mix of personal and joint expenses.
If both spouses are on a credit card account, the creditor can pursue either person for repayment, regardless of what the divorce decree says. This is why many attorneys recommend closing joint accounts before divorce proceedings begin.
Protecting Yourself from Unfair Debt Division
Here are some practical steps you can take to protect yourself during the divorce process:
1.
Gather Documentation
Start by listing all debts — including balances, account holders, interest rates, and what the money was used for. Keep copies of statements and payment history.
2.
Check Your Credit Report
Each spouse should pull their credit reports to get a full view of all debts and accounts. This helps prevent surprises and can reveal hidden liabilities.
3.
Separate Accounts When Possible
If possible, stop using joint accounts and move toward individual accounts during separation.
4.
Work With a Family Law Attorney
Don’t try to negotiate debt division on your own. Your attorney can help ensure fairness, identify hidden liabilities, and protect your financial future.
Martine Law regularly handles complex property and debt division cases in Minnesota divorces.
What Happens If a Spouse Doesn’t Pay Assigned Debt?
Even if a judge assigns a debt to one spouse, creditors may still come after both spouses if the debt was jointly held. The divorce decree only binds the two spouses — not the creditor.
If your ex doesn’t pay, your credit score could be impacted, and you may need to go back to court to enforce the decree.
What About Bankruptcy and Divorce?
Sometimes, one or both spouses consider filing for bankruptcy after or during divorce. This can further complicate the division of debt, especially if:
- The bankruptcy discharges one spouse’s debt
- A joint debt is eliminated for one party but not the other
- The bankruptcy affects property settlements
If bankruptcy is a possibility, it’s critical to speak with both a divorce attorney and a bankruptcy lawyer.
Final Thoughts
Debt division in a Minnesota divorce can be just as stressful as dividing property — sometimes even more so. Understanding what counts as marital vs. non-marital debt, how courts make decisions, and how to protect yourself is crucial to ensuring a fair and workable divorce settlement.
At Martine Law, our team of divorce attorneys is here to guide you through this process and fight for a resolution that protects your financial stability.