Married couples acquire both property and debt during their relationship. In a divorce, in addition to marital property, Louisiana courts must also address how debt should be allocated. These decisions can have serious and long-term financial consequences.
Louisiana is a community property state. Accordingly, debt acquired by one spouse is that spouse's liability. However, the debt is considered community property if it was incurred for the couple's benefit or for the other spouse's interest. A spouse's separate debt can be paid off from that spouse's own property. Community property may also satisfy that debt.
Community property can also pay off the couple's community debt. A spouse who incurred that debt can also pay it off with their own separate property. When the couple benefit from the debt, their separate or community property can pay it off.
A spouse may have the right to reimbursement where their separate property satisfies a community debt. Where community property is used to pay off a spouse's separate debt, the other spouse may also be entitled to repayment.
Other debts are also classified as separate property under state law. These include debts from one spouse's intentional misconduct or debt that did not help the couple, the family or the other spouse. After divorce and the couple's community property, a spouse may also have a reimbursement claim against the other spouse for half of payment made on community debt. When spouses cannot agree on allocation and reimbursement of debts, a judge may have to rule on their allocation.
Legal fees and costs must also be resolved. This is a community debt if it is incurred before the divorce judgment. An attorney can help Louisiana residents negotiate property division and debt. Spouses should also seek legal advice on precautions on protecting these interests and monitoring debt before the divorce is final.
Source: Louisiana State Bar Association, "Community property," Accessed April 10, 2018