MN Divorce Court's Power to Allocate Debt

Minnesota Courts have the same powers to divide debts as they are given in division of property and assets. Review and allocation of debt is made by reviewing the underlying purpose of the debt and which party has the capacity to pay the debt.

Generally, in a Minnesota divorce courts allocate the debt with the property. If the one party receives the Porsche that same party also is allocated the debt of $50,000 that goes along with the car. An example of an exception to this rule is if one of the parties has been a homemaker or if there has is a significant difference in earnings, the other party who has the means to pay the debt may be allocated the debt while the other spouse is allocated the automobile.

Another issue that courts review during a divorce is the purpose of the debt. Specifically, was the debt for a legitimate purpose? Mortgage, credit card debt, automobile loan, or business debt so long as it adds to the marital estate as is necessary are not viewed negatively by Minnesota Divorce Courts. Minnesota Statute 518.58 allows a court to consider the contribution of each party in the acquisition, preservation, depreciation or appreciation in the amount or value of the marital property. Often at issue during a divorce is waste or dissipation of assets and the accumulation of debt that does not add to the marital estate.