Marital debts are divided in a Georgia divorce along with the property, but the decree binds only you and your former spouse, not the creditor.
Debt Is Part of the Division
In Moore v. Moore, 286 Ga. 505 (2010), the Georgia Supreme Court described an “equitable division of marital property, which includes marital debt.” The couple had little but debt, about $40,000 of it incurred in the wife’s name during the marriage. The trial court left her that debt but ordered the husband to pay her $400 a month for 100 months, which the Supreme Court upheld as a property division meant to equalize the debt, though labeled alimony.
Similarly, in Cormier v. Cormier, 280 Ga. 693 (2006), a $5,000 note both spouses signed during the marriage was marital debt the trial court could order the husband to pay.
The Creditor Is Not Bound
In McDonald v. McDonald, 232 Ga. 190 (1974), the husband’s parents lent the couple $11,000 on a note both spouses signed. The divorce judgment ordered the husband to pay it in full. When his father later sued both on the note, the wife obtained an injunction stopping the suit against her. The Georgia Supreme Court reversed: a decree settling which spouse pays a debt does not bind a creditor who was not a party to the divorce. Her remedy was contempt against her former husband.
Protecting Yourself
In Hammond v. Hammond, 290 Ga. 518 (2012), the trial court made each spouse indemnify and hold the other harmless for the debts it ordered that spouse to pay. The wife challenged her duty to indemnify him. The Supreme Court found no abuse of discretion, explaining that the term simply gives a spouse another protection if the other does not pay; the husband had to indemnify her too. A hold-harmless term in a settlement agreement can also be enforced by a separate suit, as our post on incorporated separation agreements explains.
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This post is a quick overview of the law and is not intended as legal advice. Please feel free to contact our office for a consultation if you have questions about this or any other legal aspects regarding your case!