How Are Debts Divided Between Spouses or Partners on Divorce? Guidance for England and Wales

Overview

When a marriage or civil partnership ends in England and Wales dividing debts forms part of the overall financial settlement. The court’s task is to reach a fair outcome that meets both parties’ needs and any child welfare requirements. Debt allocation depends on who took the debt when it arose how it was used and each person’s ability to pay.

Which debts are considered on divorce

Courts consider joint debts and individual debts that impact the family’s finances. Typical examples include mortgages loans credit card balances overdrafts tax liabilities and business debts. The starting point is to identify all liabilities then decide whether they are joint obligations or solely the responsibility of one party.

Who remains legally liable after divorce

Legal liability depends on how the debt is held. If both names appear on a loan or mortgage both parties remain legally responsible to the lender until the debt is repaid or the lender agrees to a change. A court financial order can reallocate responsibility between the former partners but it does not change the contract with the lender. Parties should therefore contact lenders to get consent for transfers or refinances.

Court approach to dividing debts

The court treats debts as part of the matrimonial pot when they were incurred for family needs. Judges weigh debts alongside assets and assess needs first. The court will consider:

– The source and purpose of the debt

– Who benefited from the borrowing

– Each party’s income and earning capacity

– Each party’s housing and living needs

– Any child maintenance or child welfare obligations

The court can order one party to take on a debt make lump sum payments or set up periodical payments to achieve fairness.

Common practical orders

Judges use practical tools to implement a fair division:

– Order a transfer of property and leave the mortgage with the transferee subject to lender approval

– Require a lump sum payment from one party to offset debt

– Make pension sharing orders that reduce the capital available to meet liabilities

– Stipulate periodical payments to cover ongoing obligations

Solicitors aim to secure consent orders which bind the parties and reduce the need for future enforcement action.

Impact of pre‑ and post‑separation borrowing

If one partner incurred debt after separation for their own benefit the court may treat it differently from debt incurred during the marriage for family use. Debts accrued before marriage or in long established businesses may also attract special treatment. Full disclosure and clear evidence about timing purpose and benefit help the court decide.

Practical steps for separating couples

Both parties should compile full financial disclosure listing creditors balances interest rates payment schedules and security. They should inform lenders early seek independent legal advice and explore negotiation or mediation. Where possible they should obtain written confirmation from lenders when liabilities transfer or are satisfied.

Conclusion

Dividing debts in England and Wales focuses on fairness and the parties’ needs rather than rigid rules. Couples who disclose fully seek early advice and communicate with lenders increase the chance of a sustainable settlement and reduce the risk of future enforcement issues.

Alexander JLO Solicitors are well aware that going through divorce can be very difficult. Whilst the implementation of no-fault divorce back in 2022 has made the legal process much simpler, there are times, especially in relation to financial matters, when input from an experienced solicitor is vital.

With that in mind we have developed a revolutionary new service which will ascertain whether or not it’s wise to have legal advice on finances when going through divorce. Simply called Form Easy it will assess your level and type of assets and determine if you qualify for a free, no-obligation consultation to discuss your case with us and decide on the best ways forward for you. Simply click the Form Easy button, or visit the page here, answer a few short questions and we will let you have our input on whether we can help. 

At Alexander JLO we have many years of experience of dealing with all aspects of family law and will be happy to discuss your case in a free no obligation consultation. Why not call us on +44 (0)20 7537 7000, email us at info@london-law.co.uk or get in touch via the contact us button and see what we can do for you?

This blog was prepared by Peter Johnson on 1st December 2025 and is correct at the time of going to press. With over forty years of experience in almost all areas of law Peter is happy to assist with any legal issue that you have. He is widely regarded as one of London’s leading divorce lawyers. His profile on the independent Review Solicitor website can be found Here.

To follow up on any of the above please contact Guy Wilton of our family department. Guy has wide experience of acting for the firm’s clients, their family and their businesses. Guy’s experience as a lawyer started in the Northern and Welsh Circuits, including the Liverpool Courts, where he represented numerous clients after being called to the Bar, before opting to join Alexander JLO in 2017 and qualifying as a solicitor in 2024. He is a highly experienced family lawyer with a particular interest in financial remedy proceedings and child contact disputes.

Guy’s profile on the independent Review Solicitor website can be viewed here.