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Attorneys at Raleigh Divorce Law Firm

Can debt lead to divorce?

On Behalf of | Mar 9, 2022 | Divorce, Property Division |

Finances can certainly be a source of stress and conflict in a relationship. Therefore, it may not come as a surprise to hear that debt is one of the main factors that can cause the most strain on a couple.

What may be surprising to hear is that many people believe debt could lead to the end of a relationship. Why is that?

A new report sheds some light

CNBC reported that a new survey found 54% of Americans think a partner’s debt might be reason enough to consider a divorce. Debt itself can be stressful to manage. However, the report also found that debt – and the stress of dealing with it – can lead to much more significant problems in a marriage, such as:

  • Disagreements over how to spend or save money
  • The risk of financial infidelity, or one spouse hiding their debt
  • Serious effects on one’s mental health that, in turn, can impact the relationship

All of these factors could increase feelings of bitterness in the relationship. Debt, in addition to the resentment it might cause, can lead spouses to consider a divorce.

The current financial climate has an impact too

Debt and other financial matters can be very personal issues that impact a relationship. However, the overall financial climate may also be leading people to consider a partner’s debt as a reason to divorce.

Factors such as the effects of the global pandemic, the increasing issue of student loan debt as well as the changing housing market, are leaving many people facing financial stress. The uncertainty of the financial climate and the future might make individuals much more hesitant to take on even more debt.

Remember: Divorce may not resolve issues surrounding debt

More than half of Americans reported that a partner’s debt might lead them to consider getting a divorce. However, debt may remain after a divorce in North Carolina, depending on the couple’s financial circumstances.

Generally, debts incurred by one spouse prior to marriage are that spouse’s separate debt. For example, it is common for one spouse to have outstanding student loans at the time of marriage that were incurred prior to marriage.  Therefore, the student loans would be that spouse’s separate debt, regardless of the fact that the loan may still exist at the time of divorce.  However, debt can be considered marital debt that must be divided between both spouses if they:

  • Consolidated their debts
  • Refinanced the debt in a manner that obligates both parties for such debt
  • Incurred additional debts together during the marriage, whether titled in one spouses’ name or both spouses’ names

It is important to remember this. Debt can be a complicated issue in a relationship, regardless of whether it leads couples to consider divorce or not.