Divorcing couples deal with debt in one of three ways: One, they pay it all off; two, they service it jointly; or three, they divide it and each take a share. While option one may be difficult, it makes for a clean break and fresh start without friction between former spouses. Options two and three not only make for continued contact, but also put one spouse’s credit at risk. In any event, the couple is jointly responsible for the marital debt. In legal terms, however, a married couple is jointly responsible for marital debt because of joint and several liability, which means that the spouses are liable in respect of the same liability.
Under joint and several liability or all sums, a claimant may pursue an obligation against any one party as if they were jointly liable and it becomes the responsibility of the defendants to sort out their respective proportions of liability and payment.
This means that if the claimant pursues one defendant and receives payment, that defendant must then pursue the other obligors for a contribution to their share of the liability.
Marital debt could refer to the debts that are incurred during marriage. Debts are divided during divorce which determines who is responsible to repay the debt. If both spouses co-signed for a debt, both spouses will probably be held to joint and several liability for the debt. In most community property states, both spouses are equally responsible for the repayment of debt incurred during the marriage, even if only one spouse enjoyed the benefit. Typically, the debts that one spouse brings into the marriage (separate or non-marital debt) remain the responsibility of that spouse. In special circumstances (in community property states), both spouses can be held responsible for separate (non-marital) debt. When a joint tax return is filed, the Internal Revenue Service holds both spouses to joint and several liability for the tax.
Joint and several liability arises when spouses or members of an organization owe the government income taxes. In such cases, the revenue agency may collect on the debt from any and all of the debtors. In a contractual situation, where two or more persons are responsible for the same performance and default on their obligations, a nondefaulting party may hold any and all parties liable for damages resulting from the breach of performance.