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Property distribution and debt distribution in divorce

When people discuss separation agreements, the division of assets is often a hot topic. But what about the division of liabilities, such as shared debt? It is a good idea for Louisiana couples to be familiar with the state laws that govern marital debt and property distribution before going forward with a divorce.

While some property distribution issues are debateable in a divorce or separation agreement, other standards are dictated by state law. Lousiana is one of the nine community property states. This means that, regardless of whose name a debt is under, both parties are responsible for any debt accumulated during a marriage. This also applies to debts that were hidden from or opposed by one party, so full financial disclosure early on is very important.

Just like assets, debts must be divided during a divorce. This means that these debts will be managed by the same court system that deals with other family law issues throughout the breakup. Couples can choose to sell assets to resolve the debt, split the debt and place half under each person’s name and accounts, or continue to hold the debt together.

One of the challenges in a community property state such as Louisiana is getting the lender to split the debt up. For example, a credit card company may not wish to move part of the debt held by one party into an account with another person’s name. There are often solutions to these issues, such as a balance transfer card. It is a good idea to discuss these and any other property divisions issues with a divorce lawyer to better understand the legal standards in the state.

Source:, “What Happens to Debt After Divorce?“, Holly Johnson, March 30, 2018

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