When Debt Becomes a Hidden Danger in Divorce
Divorce is often thought of as a division of assets, but debts can be just as important—and sometimes more complicated. In Oklahoma, all debts that were incurred during the marriage, whether together or individually, must be identified and divided fairly. If debts are overlooked or undisclosed, one spouse could end up responsible for paying bills they knew nothing about, leading to serious financial trouble after the divorce is finalized.
For example, credit card balances, personal loans, or even contingent liabilities like guarantees on business debts or unpaid taxes need careful review. If these liabilities are not properly disclosed and addressed in the Separation Agreement, a spouse may be stuck with debts they did not agree to pay. This is why it’s critical to verify all outstanding debts before finalizing any divorce settlement. Teel v. Teel, 1988 OK 151, 766 P.2d 994.
Experienced Oklahoma attorneys understand the importance of uncovering all financial obligations during divorce. They can help ensure debts are properly listed and divided, preventing unexpected surprises down the road.
How Oklahoma Law Treats Marital Debt and Credit Cards
Under Oklahoma law, the date of separation plays a key role in determining which debts are considered marital and which may be separate. The separation date is when the parties stop acquiring joint assets and liabilities. After this point, debts incurred are generally considered separate and are not divided between spouses. Okla. Stat. tit. 43 § 121; Harden v. Harden.
Credit card debt is a common source of dispute. Before signing a Separation Agreement, spouses should identify all credit card balances and what purchases led to those charges. It is often wise to close old joint accounts and open new ones in a single spouse’s name to avoid future liability. Sometimes, the agreement will require a spouse to surrender credit cards immediately upon execution to prevent further joint debt accumulation.
Because undisclosed debts can cause ongoing financial problems, the Separation Agreement should include warranties that all debts are fully disclosed. Courts may retain jurisdiction to resolve any disputes over hidden debts later, but it is better to address these concerns upfront to avoid confusion. Teel v. Teel, 1988 OK 151.
Consulting with skilled divorce attorneys can help you navigate these issues and protect your credit during divorce.
Protecting Yourself from Financial Risk During Divorce
It is important to understand that while the court will divide marital property and debts fairly, it generally will not hold a spouse responsible for a bad investment made with marital funds unless fraud or malice is proven. Each spouse has control over property titled in their name during the marriage, but joint property is subject to division upon divorce. Sien v. Sien, 1994 OK CIV APP 159.
Separate property—such as assets owned before the marriage, gifts, and inheritances—remains with the original owner and is not divided. Okla. Stat. tit. 43 § 121. Still, careful documentation is necessary to distinguish between separate and marital property to avoid disputes.
In the context of debts, this means that premarital debts or those incurred after separation might remain the responsibility of the spouse who incurred them. For marital debts, proper identification and allocation in the divorce decree are key to avoiding long-term harm to your credit and financial future.
Contact Oklahoma Attorneys Today
Dividing debts and protecting your credit during a divorce can be complex and emotionally overwhelming. Working with knowledgeable professionals can help you understand your rights and responsibilities, and avoid costly mistakes. If you need legal help, call Wirth Law Office – Bartlesville at 918-213-0950. Their experienced team can guide you through the process with care and clarity, helping you secure a fair financial settlement and protect your credit for the future.
