What’s mine is yours? Understanding debt on divorce

February 13, 2026

When a relationship ends, many people focus on how their assets will be divided, but determining who is responsible for debts on divorce is just as important. Understanding how the law treats debt can help you make informed decisions and avoid unexpected financial pressure during or after divorce.

Why Does Debt Matter in Divorce Proceedings?

The treatment of debt on divorce is relevant regardless of whether you are settling your finances voluntarily or through the court process. It is therefore essential to understand how such debts are treated in law so that you are able to make informed decisions and reach a fair settlement.

To be clear, the family court has no jurisdiction to make an order transferring the debt of one party to the other on divorce. This is because the relationship between the debtor and the creditor is contractual e.g. between you and a credit card company. However, the family court could order one party to pay a lump sum to the other with which to pay off their credit card debt.

Marital vs. Personal Debt on Divorce

As a starting point, the Court will consider why and when the debt was incurred. Usually, two general categories of debt will arise:

  • Marital debt: Borrowing taken for the family during the marriage. This might include a mortgage, credit card spending for the household, or car finance on a shared family vehicle. The court may order both parties to take joint responsibility for the repayment of these liabilities or require one party to assume sole responsibility and to indemnify the other against non-payment.
  • Personal debt: Borrowing taken for individual purposes, such as high-living, paying for an expensive hobby or habit, or debts incurred before the marriage or post separation to include that taken to support a new partner. These are more likely to remain the responsibility of the person who created them, although the court will still consider them within the overall financial picture.
Commercial vs. Non-commercial Debt on Divorce

The court distinguishes between “soft” loans (usually informal borrowing from family or friends) and “hard” loans (often from commercial lenders or banks).

Hard loans are treated as repayable liabilities because they carry clear repayment obligations.

Soft loans are considered as not repayable unless there is strong evidence that the lender will sue the borrower for repayment. Given that this is unlikely if the lender and borrower are friends or related, the court will usually not take these loans into account when redistributing the assets in a divorce. This distinction can significantly affect the net effect of a financial settlement.

Full Financial Disclosure is Essential

Before agreeing terms of financial settlement on divorce or inviting a judge to make a decision for them, each party must provide full, frank and clear disclosure of all their financial resources and liabilities. This will identify the type of debt, will help prevent a future dispute, and will reduce the risk of any financial settlement being based on an incomplete picture of the couple’s net position.

It is important to remember that even where a financial settlement is agreed, it can only be made into a legally binding consent order if approved by a judge after reviewing the parties’ disclosure.

For more information on the financial disclosure process during divorce proceedings, see our article.

Legal Liability Still Matters

Even though the court aims for fairness, lenders will only look at the name on the account. This means that if a debt is in your name, the lender will pursue you. Where a debt is a joint debt, joint and several liability is established, meaning either spouse can be asked to repay the full amount. The court can adjust the financial settlement or order one spouse to indemnify the other, but it cannot require a lender to pursue someone who is not named on the agreement. For this reason, legal advice is essential before agreeing to take on responsibility for the repayment of a debt incurred by your former partner.

How Does the Court Decide What’s Fair?

The court considers the overall financial picture, including the purpose of the debt, when it was incurred (before, during, or after separation), each person’s ability to repay, and the needs of any children. The court’s goal is to achieve a fair outcome, not necessarily a strict 50/50 split. When dealing with debts on divorce, the court can only adjust the financial arrangements between the spouses, it cannot alter the lender’s contractual rights.

Post-separation Debts

All debt needs to be disclosed before a financial settlement is made. This includes post-separation debt incurred to pay for family living expenses, essential costs for the children or to maintain the family home, or to fund a new lifestyle with a new partner. How it will be accounted for will depend on all the circumstances.

However, if one spouse incurs more debts for personal reasons (such as discretionary spending, lifestyle choices, or risky financial behaviour) the court is far less likely to treat it as a joint responsibility. In those situations, the spouse who incurred the debt will usually be expected to bear it alone. Ultimately, the court’s focus is on fairness, and post‑separation debts are assessed through that lens rather than automatically shared. If you suspect that your former partner has borrowed money tactically, perhaps to project a false picture and frustrate your claims, or to try and secure a greater share of the available resources or otherwise gain a financial advantage, you should seek early legal advice.

Protecting Yourself During Separation

Debt often becomes a major concern during divorce, so taking practical steps to manage it early on can make a real difference. Examples of actions which may help include:

  • Checking credit reports
  • Freezing or closing joint accounts (noting that some banks require both account holders to consent)
  • Keeping records of who spent what and when and for what purpose
  • Agreeing limits on new borrowing
Getting Legal Advice

Debt can significantly affect your financial future after divorce, particularly in connection with housing. Speaking to a solicitor ensures you understand your responsibilities, options, and how to reach a fair settlement. If you would like to speak to one of our experienced solicitors, please contact us.

Sarah Speed
Partner, Family
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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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