This family law blog has discussed Colorado's law of equitable division pretty often over the past few years. We've talked about how marital assets are divided up between the spouses in a divorce. Following the guidelines laid out in Colorado's statutes, the family law court will divide the assets in a manner that it understands to be fair given the specific circumstances. But many spouses these days also have a considerable amount of debt. How is this to be divided up?
Marital debt in the Centennial State is also to be divided equitably. This was demonstrated in a decision handed down last year by the Colorado Court of Appeals. The court ruled that student loan debt incurred by one of the spouses during a marriage was marital debt to be divided equitably between the spouses in the divorce. The court also noted that this did not mean that the family law court had to divide the debt equally between the spouses.
In the case before the court, one of the spouses had accumulated student loan debt after the couple had separated but before the divorce was finalized. The court said that, although the student loans were marital debt, it might nonetheless be equitable for the family law court to allocate all of the debt to one of the spouses. Given that one of the spouses accumulated the debt after the separation, the court noted that it might be fair to allocate the entire debt to that spouse. The appeals court sent the case back to the original family law court to hear more evidence and make a determination regarding how the debt should be divided.
Debt division has become a major issue in the divorces of many couples. It can be a great idea for a spouse to have an advocate arguing for an equitable division of both assets and liabilities.