DIVISION OF PROPERTY AND DEBT in arizona


Property Division: Divorce or Legal Separation

Arizona law stated that during the divorce or legal separation process, community property, joint tenancy property or other property held in common will be divided equitably.  An equitable division is meant to be fair and reasonable under the circumstances of the parties’ financial disposition.   The court will not consider marital misconduct with regard to dividing property.  However, damages resulting from criminal convictions by one spouse against the other or a child, or excessive spending, destruction or concealment of property, or fraud regarding community property may be taken into consideration. The separate property of each spouse will be affirmed to that spouse (A.R.S. §25-318).

Common Terms:

  • Community property is property acquired during the marriage by either or both spouses.
  • Separate property is the property acquired prior to marriage or after the community termination date.  
  • Property acquired by gift or inheritance during the marriage is the separate property of that spouse.
  • Community debt is debt incurred during the marriage by either or both spouses (account holder is irrelevant)
  • Separate debt is debt incurred by either spouse prior to marriage or after the community termination date.
  • Community termination date refers to the date the Petition for Dissolution is served on the other party or an agreed upon date the parties physically separated. 
 

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How is Debt Divided During Divorce or Legal Separation?

Debts incurred during the marriage, by either or both spouses, are considered community debts.  This may be a mortgage, credit cards, vehicle loans or other loan obligations.  Commercial loans may bind both spouses as well if personally guaranteed by either spouse during the marriage.  Community debts may be assigned to one or both spouses.  A divorce or legal separation Decree which assigns responsibility for debts to either spouse is not binding on creditors to whom the debt is owed.  The divorce or legal separation order should provide the parties with a legal remedy should the responsible party fail to pay the debt. 

Each spouse has the right to obtain a copy of their spouse’s credit report.  The divorcing parties may either provide a copy of their credit report as required by the disclosure and discovery rules during the litigation process or a court may issue an order to a credit agency upon the request of either party.  Creditors are required to provide information to a spouse who is party to a divorce or legal separation action regarding the status and balance of a any debt owed by the requesting spouse.

The court may require the parties to submit a proposed Debt Distribution Plan, which contains the following information:

  • How creditors will be paid
  • Whether the parties have entered into any agreements as to responsibility for payment of community debts
  • Whether the parties have entered into any agreements with creditors as to sole responsibility by one party for the payment of the community debt