Most people going through a divorce think about the house, the retirement accounts, and who gets the car. Debt tends to get less attention until it lands on the table and suddenly becomes one of the most contested issues in the case.
Colorado law treats debt the same way it treats assets: as part of the marital estate, subject to equitable division. Understanding how that works, and where the common traps are, can make a significant difference in what your financial life looks like after the divorce is final.
Colorado Is an Equitable Distribution State
Colorado is not a community property state, where marital assets and debts are split down the middle by default. Under C.R.S. § 14-10-113, Colorado follows equitable distribution, meaning the court divides the marital estate fairly, based on the specific circumstances of the marriage. Fair does not always mean equal. One spouse may walk away with more assets and more debt, or less of both, depending on a range of factors the court weighs, including each spouse’s economic circumstances, their contributions to the marriage, and their financial needs going forward.
Debt falls under this same framework. When a court divides the marital estate, it is dividing everything of value and everything owed, together.
What Makes a Debt Marital
The general rule in Colorado is straightforward: debt incurred during the marriage is marital debt, regardless of whose name is on the account. A credit card held only in your spouse’s name that was opened after the wedding is marital debt. A car loan taken out by one spouse for a vehicle used by the family is marital debt. The name on the account does not determine whether the debt belongs to the marriage.
Debt incurred before the marriage is generally separate debt and stays with the spouse who incurred it. Debt incurred after the parties have separated but before the divorce decree is issued sits in a gray area. In the case In re Marriage of Morton, 2016 COA 1, the Colorado Court of Appeals held that all debt incurred prior to the actual decree of dissolution is technically marital debt, even if it was incurred after the parties separated. However, whether a particular post-separation debt should be shared or assigned entirely to the spouse who incurred it is a question of fairness that the court has broad discretion to decide.
There are also circumstances where debt that appears marital may be assigned entirely to one spouse. Colorado courts have recognized that debt incurred for one spouse’s unilateral benefit, without the knowledge of the other or without any benefit to the family, may be treated differently. A spouse who secretly ran up a credit card on personal expenses, travel taken alone, or gifts to third parties may find that debt assigned entirely to them.
Student Loans: The Complicated Case
Student loans are where debt division gets most nuanced, because the answer depends heavily on timing and purpose.
Loans taken out before the marriage are separate debt. Period. They belong to the spouse who borrowed them.
Loans taken out during the marriage are a different matter. The seminal Colorado case on this question is In re Marriage of Speirs, 956 P.2d 622 (Colo. App. 1997), which built on the earlier decision from In re Marriage of Booker, 811 P.2d 405 (Colo. App. 1990). In Speirs, a wife earned a law degree during the marriage. The court allocated $54,000 of the student loan debt between the parties as funds spent on family living expenses, but assigned the remaining $37,000 in tuition costs solely to the wife, finding that the degree was earned late in the marriage and would primarily benefit her. The husband argued that since the degree itself was not marital property under Colorado law, the debt used to obtain it should not be marital either. The Court of Appeals disagreed. It found that a spouse’s pursuit of higher education is often a shared goal during a marriage, that both spouses expected to benefit from the increased earning capacity the degree would bring, and that student loan proceeds frequently support the household beyond just tuition costs. The loans were marital.
But marital does not mean shared equally. The court in Speirs also made clear that a trial court has the discretion to assign a student loan entirely to the spouse who incurred it, particularly when the degree was earned late in the marriage and will primarily benefit that spouse going forward rather than the marriage as a whole. The inquiry is not just whether the debt is marital but who benefited, when, and how much.
Loans taken out after separation but before the divorce decree present a similar analysis. They are technically marital under Morton, but a court may assign them entirely to the borrowing spouse if the other spouse derived no benefit from them.
Credit Card Debt: Name on the Account vs. Who Spent the Money
Credit card debt incurred during the marriage is generally marital, but courts look carefully at what the money was spent on. Household expenses, family vacations, children’s clothing and activities, home repairs — these purchases benefited the marriage and the debt is treated accordingly. Spending that benefited only one spouse, particularly if concealed from the other, is treated differently.
One common scenario worth understanding: if your spouse had a credit card before the marriage and you were later added to the account, or if your name appeared on the account during the marriage, the debt accrued during the marriage on that account may well be considered marital and subject to division, even if it started as your spouse’s separate debt.
Courts also look at balance increases during marriage. If your spouse brought a credit card into the marriage with a balance and that balance grew significantly during the marriage, a portion of the increase may be treated as marital debt even if the original account was separate.
Car Loans: Generally Straightforward
Vehicle loans are among the more straightforward debt division questions. A car loan taken out during the marriage to purchase a vehicle used by the family is marital debt. The court will typically assign the loan to whichever spouse retains the vehicle, with the overall debt allocation factored into the broader division of the marital estate.
A car loan your spouse brought into the marriage is their separate debt, unless the circumstances of the marriage changed that, for example if marital funds were used to pay down the loan or if the vehicle became effectively a shared family asset.
The Critical Thing Most People Don’t Know About Creditors
Here is the point that surprises people most: a Colorado divorce decree assigns debt between spouses, but it does not change your relationship with your creditors.
If a joint credit card is assigned to your spouse in the divorce, and your name is on that account, the credit card company does not care what your divorce decree says. They are not a party to your divorce. If your spouse stops paying, the creditor can come after you. Your credit score can take the hit. Collections can start against you. None of your spouse’s obligations to you under the divorce decree changes any of that from the creditor’s perspective.
Your recourse in that situation is to go back to court and seek a contempt order against your spouse for failing to honor the debt assignment. That may eventually get the debt paid, but it takes time, legal fees, and effort, and it does not undo the credit damage that has already occurred.
The practical lesson: wherever possible, joint debt should be addressed at the time of the divorce, not just assigned. Refinancing a loan into one spouse’s name, paying off a joint credit card from the proceeds of asset division, or closing joint accounts removes your exposure entirely rather than leaving you dependent on your former spouse’s financial behavior. Remove your name from any account for which you are no longer responsible as soon as the divorce is final.
What the Court Weighs When Dividing Debt
When a Colorado court allocates marital debt under C.R.S. § 14-10-113, it considers the full picture of the marriage: each spouse’s income and earning capacity, the assets each spouse is receiving in the division, the purpose of the debt and who benefited from it, each spouse’s economic circumstances after the divorce, and any other factors relevant to achieving a fair result.
Colorado is a no-fault divorce state, which means the court will not assign a larger share of debt to a spouse as punishment for conduct that led to the end of the marriage. Misconduct is not a factor in property and debt division unless it involves dissipation of marital assets, meaning one spouse deliberately ran up debt or wasted marital funds in anticipation of the divorce.
What to Do Before Your Case Is Filed
The most important thing you can do before or early in a divorce is get a clear picture of what debt exists, in whose name, and what it was incurred for. Pull your credit report. Request your spouse’s credit report through the court process if necessary. Colorado law requires full financial disclosure from both parties, and both spouses are required to submit a Sworn Financial Statement to the court detailing all assets and debts.
Debt that is not disclosed does not disappear. If a spouse conceals debt and it surfaces later, the court has tools to address it, and concealment reflects poorly on the party who hid it.
Debt division is not a peripheral issue in a Colorado divorce. It shapes your financial starting point after the case is over. Getting it right requires understanding not just what the court will order but what creditors can still do regardless of what the court orders.
At Boal Law Firm, PC, we help clients in El Paso County navigate property and debt division in divorce. Call us at (719) 203-6339 to schedule a consultation.