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How do courts divide debts in a Hawaii divorce?

On Behalf of | Feb 5, 2024 | Property Division

In marriages, spouses usually share the responsibility of debts as part of their commitment towards each other and the union, regardless of the debt or who acquired it. However, the same may no longer be applicable in a divorce.

Understanding how courts divide during a divorce can help parties protect their interests and avoid assuming debts that are not theirs.

Applying equitable distribution on marital debts

In Hawaii, courts divide debts between divorcing spouses the same way they divide assets—fairly and equitably. However, this rule only applies to marital debts or those debts the spouses acquired after marriage. It does not apply to liabilities each spouse incurred before the union, considered separate debts.

Hence, categorizing debts as marital or separate is essential for courts to properly distribute debts during divorce property division.

Determining what division qualifies as equitable

Generally, courts divide marital properties and debts in their totality. Hawaii courts consider several factors to determine a fair division of marital assets and debts, such as each spouse’s age, health, skills, earning potential and current financial situation. Courts can also consider misconduct, such as hiding assets or excessive spending, when deciding the final division.

The courts may also consider the type of debt, whether it is secured or unsecured. With secured debts, such as car loans, a particular asset backs it up as collateral. The spouse who retains the asset typically assumes the associated debt. On the other hand, no assets serve as collateral for unsecured debts, like credit card loans. Courts divide them based on their assessment of the available factors.

Receiving reliable guidance

The division of property in a divorce can be complex and vary significantly on the facts and circumstances of each case. Hence, it may be beneficial for those going through a divorce in Hawaii to seek the guidance of an experienced family law attorney who can provide advice tailored to their situation.

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