DO YOU KNOW HOW DEBT WILL BE HANDLED DURING YOUR DIVORCE?
There are a lot of aspects to a divorce. You’ll need to deal with property division, child custody, child support, and alimony, any of which can have a tremendous impact on your future. While you certainly need to take a holistic approach to these matters, you also can’t overlook the importance of how marital debts are divided during the course of your marriage dissolution.
HOW MARITAL DEBTS ARE DIVIDED
Our state recognizes equitable division, meaning that the marital estate is divided in a fair, although not necessarily equal, fashion. This type of division applies to marital debts, too. Therefore, your first step in assessing debt is to consider whether it is individually owned or if it is marital in nature. Generally speaking, each spouse is responsible for any debt incurred during the course of the marriage, even if it was taken out by the other spouse.
However, some debt may be deemed individually owned and therefore not subject to division during the divorce process. This typically includes debt that was incurred prior to the marriage, and it might also include debt that was incurred during marriage but after the couple started living apart. Just keep in mind that in some circumstances spouses use marital assets to pay down their individually owned debt. This can give rise to arguments for reimbursement.
DON’T BE TAKEN ADVANTAGE OF DURING YOUR DIVORCE
The outcome of your divorce can have a tremendous impact on your future. That’s why you need to be prepared and have a firm understanding of how the law applies to your set of circumstances. If you don’t take the steps necessary to fully prepare yourself, then you could end up at a financial disadvantage.