DIVISION OF DEBTS

Chapter 5 Division of Debts

Pertinent Utah Code. (See: http://le.utah.gov/xcode/code.html)

§30-2-9
§30-3-5

Utah is an ‘equitable’ divorce state (not necessarily equal division), as opposed to a ‘community property’ state. In simple terms, the court will look at each party’s situation, contributions, lifestyle, debts, assets, children and any other considerations the court may deem appropriate, and then attempt to divide those items in a fair manner.

For debts, the court may consider when the debt was incurred (pre-marriage, or during the marriage), who incurred the debt, the purpose of the debt, who benefits from the debt, and each party’s ability to pay. There is no fixed formula for the division of debt. However, there are some general guidelines. For example, student loans generally are attributed to the person who incurred the debt. Debts incurred before the marriage are generally attributed to the person who incurred the debt. Debts during the marriage, unless the debt was for a family expense, are generally attributable to the person incurring the debt,   The court may order how each party should be responsible for joint payment of debts, including an order to notify creditor’s of the court’s order.

It is important to note that a final decree cannot terminate the obligation(s) formed by contracts between the parties and a creditor. Although it can order which party to pay the debt.

Divorce Note: As you prepare your petition, gather all debts and make a list of what debts were incurred during the divorce, which party incurred the debt, which party benefited from the debt, whether the debt was personal or for family expenses, and how the debt should be divided. Some debts, such as mortgages, are clarified when discussing the division of the property. Include in the debt section items such as ongoing obligations, credit card debt, loans, student loans, stock investment losses owed, taxes owed, children school tuition, car payments, and the like.