When a married couple decides to separate, the division of assets and debts often becomes just as challenging as emotional issues. Divorce in Arizona does not just involve dividing homes, vehicles, or a retirement account, but also requires courts to determine how to divide credit cards, mortgages, medical bills, student loans, and other obligations.
Arizona is a community property state, which means assets and debts acquired during the marriage are considered community property in Arizona and subject to division during a divorce. While this sounds straightforward, the debt division process can be far from simple. Courts must look at Arizona law, the timing of debts incurred, and whether the debt benefitted both spouses or was tied to separate property.
Table of Contents
- Understanding Community Property and Community Debt in Arizona
- What Counts as Separate Property and Separate Debt?
- Credit Card Debt in an Arizona Divorce
- How Courts Divide Mortgages, Car Loans, and Secured Debt
- Student Loans and Debt Division in Arizona Divorce Cases
- Medical Bills, Unsecured Debt, and Family Law Implications
- Protecting Yourself From a Spouse’s Hidden Community Debts in a Divorce
- Real-World Examples of Debt Division During a Divorce in Arizona
- Debt Division at a Glance
- FAQs About Community Debts in a Divorce
- Contact the Law Offices of Daniel Hutto
At the Law Offices of Daniel Hutto, we know that dividing assets and debts during a divorce can feel overwhelming and have a serious impact on your financial future. Our team is committed to guiding you through the divorce process, helping you understand community property rules, and ensuring that the division of debt is handled fairly under Arizona law.
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Understanding Community Property and Community Debt in Arizona
Under A.R.S. § 25-211, Arizona community property rules define how assets and debts are treated in divorce proceedings. In most cases, debts incurred during the marriage are considered community debt, even if only one spouse’s name appears on the account.
This means a debt in Arizona divorce cases can be shared even when one spouse takes out a loan or incurs credit card charges. For example:
- If one spouse takes out a car loan during the marriage, that loan is typically subject to division during a divorce.
- If credit card charges are made for groceries or children’s expenses, that balance is community property that must be divided equally.
Arizona divorce law recognizes that both assets and debts acquired during the marriage belong equally to both spouses. Still, the court has discretion under A.R.S. § 25-318 to assign debts unequally when fairness demands it. For instance, if one spouse’s reckless behavior caused the debt, that debt may be assigned solely to that spouse.
What Counts as Separate Property and Separate Debt?
Arizona divorce law also recognizes separate property and separate debt. Under A.R.S. § 25-213, debts incurred prior to the marriage or debts tied only to one spouse’s separate property may not be divided in an Arizona divorce.
Examples include:
- Separate property loans tied to an inheritance.
- Debts incurred before marriage, such as student loans or a credit card balance.
- Debts incurred after a divorce petition is served, when the marital community is legally ended.
Even if a debt was acquired in one spouse’s name, the court may still consider whether it was community property in Arizona if both benefitted. A creditor can still pursue either spouse if their name appears on the account, regardless of the divorce decree. This is why family law attorneys stress careful review of financial records and disclosure during divorce proceedings.
Credit Card Debt in an Arizona Divorce
Credit card debt in Arizona divorce cases can be especially contentious. Courts look at when the debt was incurred and whether it benefitted the marital property or community property that must be divided.
- Community debt: Charges for groceries, household expenses, or vacations are typically considered marital debt.
- Wasteful spending: If one spouse’s hidden credit card debt involves gambling or funding an affair, the court may assign it solely to that spouse.
For example, a married couple with $15,000 in credit card debt that supported household expenses would likely see that debt divided equally. However, if $5,000 was tied to one spouse’s personal gambling, that portion could be assigned to them alone.
How Courts Divide Mortgages, Car Loans, and Secured Debt
Secured debt such as a mortgage or car loans is a common issue in property division.
Mortgages
If both spouses are listed on the mortgage, either spouse remains liable to the creditor even after the divorce is finalized. The court may:
- Assign the home to one spouse, requiring refinance to remove the other spouse’s name.
- Order the home sold, with the mortgage balance and any equity divided in Arizona.
Car Loans
Car loans acquired during the marriage are considered marital debt and typically divided in Arizona. The court may assign the car and its loan to one spouse. Even if only one spouse drives the vehicle, both are usually liable until refinancing occurs.
Secured Debt
Other types of secured debt, such as home equity lines, follow the same rule: if acquired during the marriage, they are considered community debt.
Student Loans and Debt Division in Arizona Divorce Cases
Student loans create unique issues in Arizona community property law. Whether student loans are considered marital debt depends on whether the marital community benefitted.
- If one spouse took out student loans during the marriage, and the increased income supported both, that debt may be divided equally.
- If student loans were incurred prior to the marriage or right before the divorce petition, they may be considered separate property.
For example, one spouse’s medical degree funded by loans may increase marital assets significantly, leading the court to treat the loans as community debt.
Medical Bills, Unsecured Debt, and Family Law Implications
Medical debt and other unsecured debt are often unavoidable. Under Arizona law, medical bills incurred during the marriage are considered community property in Arizona and typically divided in an Arizona divorce.
Other types of unsecured debt may include:
- Personal loans
- Credit lines
- Joint debt on credit cards
If the debt was incurred after the divorce petition is served, it may be considered separate debt. Courts also look at whether incurring the debt was reckless or wasteful.
Protecting Yourself From a Spouse’s Hidden Community Debts in a Divorce
One of the biggest concerns in family law is when one spouse’s hidden debt is discovered. Full disclosure of assets and debts acquired during the marriage is required, but sometimes a spouse takes secret loans or hides obligations.
Ways to protect yourself include:
- Reviewing all financial records.
- Checking your credit report for joint debt.
- Asking the court to assign wasteful or hidden debts to the responsible spouse.
A skilled divorce attorney can help you understand your rights and legal options when facing a divorce in Arizona.
Real-World Examples of Debt Division During a Divorce in Arizona
- Credit Card in One Spouse’s Name: Even if only one spouse’s name is on the card, credit card debt used for marital property expenses is typically divided in Arizona.
- Car Loan Before Marriage: A car loan incurred prior to the marriage may be separate property, but if paid with community funds, reimbursement may apply.
- Medical Debt During Marriage: If medical bills were incurred during the marriage, they are considered community debts in a divorce.
- Hidden Gambling Debt: One spouse’s wasteful gambling may be assigned solely to them.
These examples show how the type of debt, timing, and use determine how courts divide these debts.
Debt Division at a Glance
| Type of Debt | Community or Separate? | Notes / ARS Reference |
| Credit Cards | Community Debt | A.R.S. § 25-211 |
| Mortgages | Community Property | Typically divided in Arizona courts |
| Car Loans | Community Property | Assigned with vehicle |
| Student Loans | Depends | Community if both benefitted |
| Medical Debt | Community Debt | A.R.S. § 25-318 |
| Hidden or Wasteful Spending | Separate Debt | Assigned to responsible spouse |
FAQs About Community Debts in a Divorce
- Can a creditor ignore my Arizona divorce decree?
Yes. Even if debts are divided in an Arizona divorce decree, a creditor may pursue either spouse if their name is on the loan. - Are all debts acquired during the marriage considered community property?
Generally yes, but courts may treat wasteful or reckless debts differently. - What happens if one spouse stops paying the mortgage or joint debt?
Both can face foreclosure or repossession since Arizona is a community property state. - Can debts be divided unequally?
Yes. Arizona law allows equitable division of property and debt when fairness requires it. - Does a retirement account loan count as marital debt?
Yes, if taken during the marriage, it is typically considered community debt.
Contact the Law Offices of Daniel Hutto
After earning his Juris Doctor, Daniel began his legal career as a law clerk at a small Civil and Family Law office in north Phoenix. He soon became an associate attorney in the firm’s Family Law practice before joining the Maricopa County Attorney’s Office, where he quickly built a strong reputation as a dedicated advocate for justice. Realizing that his passion was best served by defending individuals and families, Daniel returned to private practice with a boutique Criminal and Family Law firm in central Phoenix. He later joined one of Arizona’s largest Criminal Defense law firms, where he gained extensive experience handling both criminal defense and complex family law matters. After five years of practice, Daniel founded the Law Offices of Daniel Hutto, PLLC, to provide aggressive, compassionate, and complete legal representation for Arizona families and individuals.
If you are facing a divorce involving significant debts, high-value assets, or complex property division, the Law Offices of Daniel Hutto are here to help. We provide free, one-on-one consultations to give you clear guidance and support tailored to your case. Call 602-932-1655 today to schedule your free consultation with an experienced family law attorney.
