We are splitting 401(k). He took many loans and used the money for family bills. Does this make it a marital rather than separate property because of the loans?
No. But you are not splitting the 401(k), the judge is. There is no provision for an employee to simply request funds to give to the ex-spouse. But there is a QDRO, a qualified domestic relations order whereby a judge orders this to occur. The lawyers will be aware of the loans, as will the judge, and will take that into account when splitting the 401(k). Depending on what other money the Ex has, he make be required to pay the loans back, partially, or in full.
No one can guess what will happen. The judge will take all aspects of your finances and current earnings into account.