When most people think about divorcing couples disagreeing on a property division settlement, they envision images of lists of cars, homes, photo albums or stock portfolios. Something not typically thought of - but, nevertheless, a huge part of any discussion about dividing marital assets - is marital debt.
A marriage does not just involve two hearts who come together; it involves bringing together two complete lives filled with memories, belongings and, yes, debts. Most pre-marital debts involved by a single party will remain separate upon divorce. Joint debts, however - even those incurred by the parties before they were married - are subject to division and inclusion in a property division settlement. Importantly, judges have a great deal of discretion when establishing a fair and equitable division of marital debt.
Regardless of how the debt is divided or balanced against a property award, if you are involved in a divorce - or anticipate that you will be in the future - think about the following:
- Even if your spouse is awarded a portion of your joint marital debt, if he or she is unable to pay, the creditor could bring a legal action against you to recover the balance due; since both of you agreed to the terms of the credit extended to you, you are both legally responsible for ensuring it is paid
- Joint credit cards or lines of credit should be closed as soon as divorce becomes a certainty to ensure that your spouse cannot run up a big balance in the interim
- If you have only had joint accounts with your spouse during the marriage, consider applying for solo accounts prior to the divorce so you can start building your own credit record
- Try negotiating with creditors for a lower interest rate or payment on those debts you are assigned as part of the divorce decree
If you are in the midst of a divorce and want to learn more about the methodology and practice of dividing marital debt and assets, speak with an experienced New York family law attorney today.
