Debt Trajectories of Divorcing Mothers and Fathers: Divorce as a Dynamic Economic Uncoupling

Debt is an increasingly central component of American households' financial portfolios and is closely associated with marital relationship quality. Yet research on the economic consequences of divorce has rarely examined how individual debt holdings change as couples separate. We combine individual-level monthly credit reports with court records on Wisconsin divorce cases involving parents of minor children to study debt trajectories from two years before to two years after divorce petition filing. We find that debt declines in anticipation of divorce and begins to recover after petition filing for both mothers and fathers, although trajectories vary substantially by debt type and parent gender. Asset-backed debts, especially mortgages and auto loans, show the clearest evidence of anticipatory deleveraging and post-petition recovery, while unsecured debts generally decline or remain stable. Supplementary analyses suggest that reductions in non-mortgage debt are concentrated among parents who exit mortgage debt, consistent with the possibility that asset-backed deleveraging helps reduce other obligations. These findings show that debt is not a uniform marker of economic strain: while parents reduce potentially constraining unsecured debts during divorce, access to asset-backed credit may also serve as a resource for rebuilding financial stability after separation.