Couple Managing the Debt

Dividing Debt in a Kentucky Divorce

Evan Taylor Law Office PSC Aug. 15, 2023

During a marital dissolution in Kentucky, the divorcing couples are expected to divide their community property—including assets, money, debts, and liabilities accrued during the marriage—equitably. However, identifying the type of debt, how the debt was incurred, and how to achieve an equitable division of marital debt can bring about various complex issues. If you're facing such a situation in your divorce, speaking with a knowledgeable  Kentucky family law attorney is vital. 

At Evan Taylor Law Office PSC, we offer skilled guidance to clients in divorce-related matters, including asset and debt division. Our lawyer can help determine the character of each debt and explore your options to achieve a favorable resolution. We're proud to serve clients across Owensboro, Henderson, McLean County, Hancock County, Ohio County, and the rest of Kentucky. 

Marital Property vs. Separate Property in Kentucky 

In a typical divorce, assets and property owned by the couple are usually categorized into either marital property or separate property

Marital Property 

Marital (or community) property comprises all assets, property, and debts acquired by either or both spouses during the marriage. Common examples of community property include marital home, cars, bank accounts, income, royalties, stocks, furniture pieces, rents, 401(k) accounts, credit card charges, pension plans, and all other assets accumulated by the couples during their marriage. Essentially, community property will be subject to equitable division during divorce. 

Separate Property 

Conversely, separate property comprises any asset and property acquired or debt incurred entirely by one of the spouses before their marriage. Separate property may include personal gifts from third parties, rents and profits from separate property, inheritance, personal injury awards, and items acquired after separation. Unlike community property, separate property will typically not be subject to property division in Kentucky. 

How Debt Is Divided 

Credit card debt, medical debt, and mortgages are among the most common debts that are incurred by married couples. However, this debt won't automatically go away during a divorce. When dividing debts, the Kentucky courts may consider the following factors to ensure equitable debt distribution: 

  • Each spouse's debt and liability; 

  • Each spouse's financial situation or economic circumstances; 

  • How the debt was incurred—for instance, one spouse accumulated debt recklessly through gambling.

An experienced Kentucky property division attorney can help protect your best interests during debt division and ensure that you're not held accountable for debts incurred after separation. 

Date of Separation 

According to Kentucky law, any debt incurred or asset acquired after the date of separation will be regarded as separate debt or separate property, respectively. As a result, the spouse who incurred the separate debt will be responsible for repaying them. 

Furthermore, in order to establish the official date of separation, you must show that: 

  • There has been a physical separation between you and your estranged partner—you now live separate and apart. 

  • You or your estranged spouse intends to end the marital union. 

Because every case is unique, it’s important to reach out to a knowledgeable divorce lawyer to guide you and your family through the debt division and divorce process. 

Dependable Legal Guidance 

Property and debt division can be among the most contentious issues in divorce cases. In addition, distinguishing between separate debts and marital debts—and determining the exact date of separation—can make everything even more complex. At Evan Taylor Law Office PSC, we're dedicated to guiding clients through the complicated procedures involved in property and debt division in divorce. As your legal counsel, we can work to understand your unique situation, determine who's responsible for each debt, and outline an effective strategy to help you move forward. 

Contact us at Evan Taylor Law Office PSC today to schedule a case assessment with a property division attorney. We're proud to serve clients across the entire state of Kentucky, including Owensboro, Henderson, McLean County, Hancock County, and Ohio County.