Dividing debts during divorce can be just as important — and complicated — as dividing assets. Whether the debt is in one person’s name or shared, it could affect your financial settlement.
Most people focus on who gets the house, pension, or savings during a divorce — but debts can have just as much impact on your future. From loans and credit cards to overdrafts and car finance, it’s important to understand how debt is handled legally and what your responsibilities may be once the marriage ends.
This guide explains how debts are treated in divorce, whether you’re liable for each other’s borrowing, and how to protect yourself financially.
Are debts shared equally in a divorce?
Not automatically. Just like assets, debts must be considered and divided fairly, but not necessarily 50/50.
The court looks at a range of factors, including:
- Who incurred the debt
- Whether it was for joint benefit (e.g. a family holiday, house renovation)
- Whose name it is in
- The financial needs and incomes of each person
- Whether either party can realistically repay it
Debts taken out for family use are more likely to be considered joint responsibilities, even if only one person’s name is on the paperwork. On the other hand, individual debts used for personal spending may be treated differently.
What’s the difference between joint and individual debt?
Joint debt is when both names are on the agreement — like a joint loan, joint mortgage, or joint overdraft. Both people are equally responsible, and the creditor can pursue either person for the full amount.
Individual debt is when the borrowing is in one person’s name only — like a credit card, personal loan, or car finance. However, that doesn’t mean the other person is completely free from responsibility. If the debt was used for joint benefit, the court may still include it in the financial settlement.
It’s important to note: lenders are not bound by your divorce agreement. Even if a court says one person is responsible for a debt, the creditor can still pursue whoever signed the agreement.
How are debts included in a financial settlement?
When negotiating a financial settlement — or applying for a Consent Order — debts should be disclosed just like assets. The court will review:
- Total amount of debt
- Who it belongs to
- What it was used for
- How it affects each person’s financial future
In some cases, debts may be split equally. In others, one person may agree to take on more debt in exchange for a greater share of an asset (like equity in a home). This is often part of a negotiated agreement.
The most important thing is to make sure all debts are included and dealt with clearly. Ignoring them can cause confusion or unfair outcomes later on.
What about hidden or undisclosed debt?
If one spouse has taken on debt secretly or failed to disclose it, this can complicate things. Full financial disclosure is required during divorce. If debts are discovered later, the court may reopen the settlement or adjust the outcome.
If you suspect your ex is hiding debts — or using credit in a way that could affect your financial future — get legal advice straight away.
Will divorce affect my credit score?
Divorce itself doesn’t directly impact your credit rating — but joint debts and linked financial accounts can. If your ex stops paying a joint debt, you may still be held responsible. Missed payments can affect your credit score even if the debt wasn’t your idea.
You can apply for a “financial disassociation” with credit agencies to separate your credit records once your finances are divided.
It’s also a good idea to:
- Close joint accounts
- Remove one name from shared borrowing, where possible
- Monitor your credit report for any changes
How to protect yourself from debt in divorce
Here are practical ways to protect yourself:
- Get a legally binding Consent Order to record how debts are to be divided
- Include all debts in your financial disclosure — even personal ones
- Close or refinance joint debts where possible
- Keep written records of agreements about repayment
- Avoid relying on informal promises — they won’t hold up in court
- Seek professional advice if large or complex debts are involved
Most importantly, make sure your financial settlement is approved by the court. This gives your agreement legal weight and helps prevent future disputes.
How Easy Separation UK can help
We help you finalise your financial settlement — including how debts are handled — with a legally binding Consent Order or Clean Break Order.
Our team can:
- Draft your agreement clearly, including assets and debts
- Submit it to the court for approval
- Help protect you from future claims or disagreements
- Handle everything online, with fixed fees and expert support
Don’t let debt complicate your future.
Let us help you divide finances fairly and move forward with clarity.
