How is Medical Debt Divided During Divorce?
Most people understand that divorcing couples must divide their assets as part of the process. However, many do not realize that debts are also divided. This debt includes not only credit card bills and auto loans, but medical debt as well. Medical debt often becomes a contentious issue during divorce and it is important to understand who is responsible for paying it. Below, our Franklin property division attorney explains more.
Equitable Distribution Laws in Tennessee
Before you can understand who is responsible for paying medical debt during and after divorce, it is first important to understand Tennessee’s equitable distribution law. Under this law, marital property is divided fairly during divorce, which does not necessarily mean equally. Marital property includes assets and debts that are acquired during the marriage. Any property acquired prior to the marriage is classified as separate property. While the law is quite clear, there are also some exceptions.
Most medical debt acquired during the marriage is classified as marital debt. For example, if a woman had a child during the marriage, the hospital bill would likely be in her name alone. Still, due to the fact that the birth occurred during the marriage, and the debt benefitted both parties, the debt would still be considered marital. The court will consider many factors when dividing medical debt and they are as follows:
- The length of the marriage
- The health and age of each spouse
- Future earning capacity of each party
- The reason the debt was incurred
- The party who benefitted from the debt
- The ability of each party to repay the debt
When is Only One Party Responsible for Medical Debt?
While both parties are generally responsible for medical debt acquired during the marriage, there are some exceptions. They both involve the two parties reaching an agreement on their own about how to divide medical debt.
A premarital agreement can classify medical debt as the separate property of one spouse. For example, a couple may get married knowing the wife has a chronic health condition that will require years of treatment. A premarital agreement can designate the debt as the wife’s separate property and upon divorce, the husband would not be responsible for paying it.
When a couple was legally separated before they divorce, a separation agreement can also outline which party is responsible for paying medical debt. A separation agreement resolves all the same terms as a divorce including property division, alimony, child custody, and child support. Separation agreements are also legally binding and submitted to the court. If the couple decides to divorce after a legal separation, a previously drafted agreement can simplify the process.
Contact Our Property Division Attorneys in Franklin for Help with Your Case
Property division issues are always some of the most contentious in any divorce case. At Beal, Nations & Crutcher, our Franklin property division attorneys can advise on your case and whether you will be responsible for paying medical debt after divorce. Call us now at 615-861-2304 or contact us online to schedule a consultation so we can review your case.