When you go through a divorce, you may have an idea for how you and your spouse should divide your assets. But how do you split your debt?

You and your spouse likely have both separate and joint debt. Between a house mortgage, car loans, student loans and credit cards, you or a court will have to decide how that debt splits between the two of you. But dividing debt can be even more complex than dividing your assets.

A divorce decree separates your assets and your debt

To make your divorce official, a judge will deliver a divorce decree. This lists all the rulings for your divorce. Part of the divorce decree is the judgement on splitting debt. Once you receive this decree, you and your former spouse must follow its ruling.

Lenders don’t pay attention to divorce decrees

However, the lenders who approved credit cards and loans are not bound to this decree. To them, the only thing that matters is the name on the loan paperwork or the credit card. Even if the judge ordered your spouse to pay a certain portion of your credit card or jointly held debt, the lender will hold you responsible if the payment isn’t made since your name is on the account.

Refinancing to separate debt

To avoid this confusion, you and your former spouse may want to consider adjusting your finances. For example, both your names may be on the two family cars. But after the divorce, you each agree to pay for only one car. Refinancing the loans can take your spouse’s name off your car and your name off your spouse’s car. That way, if one of you falls delinquent, the lender will only hold that person responsible.

Or, if you have a joint credit card with high debt, you may be able to get a new card that allows you to transfer a balance off the existing card. Then you can take your name off the joint account. Doing this lets you pay off your share of the debt while separating it from your former spouse.

Separating debt can reduce complications

Dividing your joint assets can be complex. But dividing debt can be even more difficult since lenders don’t pay attention to a divorce decree. However, if you can work with your spouse to separate your debt, you can avoid any complications in the future.