What Happens to Outstanding Debts in a New Jersey Divorce?
When going through a divorce in New Jersey, people often focus on dividing their home, other valuable personal property, savings accounts, and retirement benefits. Marital debts often get overlooked, but credit card balances, car loans, medical bills, and mortgages do not disappear just because the marriage is over.
Our Red Bank divorce lawyer explains how New Jersey law treats marital debt and what you need to know to protect yourself financially.
How New Jersey Divides Marital Debt in a Divorce
According to a June 25, 2026 News 12 report, New Jersey ranks among the highest in the nation when it comes to carrying debts. Unfortunately, these debts often get overlooked during a divorce.
As an equitable distribution state, both marital assets and debts are divided fairly, not evenly, between divorcing spouses. Under New Jersey Statute 2A:34-23, judges consider each spouse’s income, earning capacity, and overall financial situation when determining who is responsible for what. Debts commonly subject to equitable distribution in a New Jersey divorce include:
- Joint credit card debts;
- Mortgages;
- Car loans;
- Medical bills;
- Personal loans;
- Business debts.
Note that equitable division only applies to marital property and debts. Individual debts incurred before the marriage generally remain that party’s responsibility.
Why a New Jersey Divorce Decree Does Not Always Protect You From Creditors
One of the most important and frequently misunderstood aspects of debt division in divorce is the difference between what a divorce court orders and what a creditor is legally bound to honor.
If your divorce agreement assigns a joint debt to your spouse and they fail to pay it, the creditor can still come after you. Situations that can leave you vulnerable include:
- A joint credit card was assigned to your spouse, and they stop making payments.
- There’s a mortgage in both names, but the spouse who keeps the property falls behind on payments.
- You have a joint car loan, and the vehicle is awarded to your spouse.
- Business debts were divided in your divorce decree but remain jointly guaranteed.
- Medical debt resurfaces after the divorce is finalized.
The most effective way to address joint debt in a divorce is to eliminate it before the case closes, either by paying it off, refinancing it in one spouse’s name alone, or selling the asset it is attached to and distributing the proceeds. Where that is not possible, indemnification clauses in the divorce agreement can provide some legal recourse if a former spouse fails to pay. However, collecting on those provisions is not always simple.
Schedule a Consultation With Our Experienced Red Bank Divorce Lawyer
Debt division in a New Jersey divorce can have long-lasting consequences for your credit and your financial future. At Sanvenero & Cittadino Law Office, our Red Bank divorce lawyer works with clients to identify all marital debt, evaluate their exposure, and negotiate settlements that genuinely protect their financial interests under New Jersey law.
To schedule a consultation, call or contact us online today. We represent clients in Shrewsbury, NJ; Monmouth County, NJ; Central New Jersey; and throughout New Jersey.
Sources:
newjersey.news12.com/2026/06/25/new-jersey-ranks-among-highest-in-nation-for-debt-per-resident/7MfFqe0gRFT5h9fNi1Jp04
lis.njleg.state.nj.us/nxt/gateway.dll?f=templates&fn=default.htm&vid=Publish:10.1048/Enu