During a divorce, spouses must sort their finances and determine who owns assets and debts. The first part of debt division is to determine how much total debt has been accumulated. This can be achieved by ordering credit histories from each of the three major credit bureaus. Additionally, the couple should stop accruing new debt; after all, it can be hard to determine who should pay if the list keeps growing.
Debt division during a divorce can depend on the state’s community property or equitable distribution laws. In some areas, both spouses share responsibility for debts accrued during the marriage, even if the debt is in one person’s name. In equitable distribution areas, the spouse incurring in the debt is responsible for its payment.
Distributing Debt
After obtaining the credit reports, the spouses can determine which debts are shared and which are solely owned. Singly held debts are easy to assign, but sorting shared debts can be complex. Divorcing spouses have several options to distribute shared debt.
* Jointly held debts can be paid with marital assets before divorce proceedings are initiated. This saves the effort of dividing those debts.
* Either partner could take on a larger portion of the debt in return for a larger share of marital assets. While the other spouse gets less after the divorce, they also have less debt to pay off.
* Spouses could divide the debt evenly, making both responsible for the debt in creditors’ eyes.
Courts’ Division of Debt in Divorce
In a divorce judgment, the court divides debts, determining which spouses pay a particular debt. In most cases, community debt is equally divided. If one spouse pays a debt for which the other spouse is responsible, that person and his or her divorce attorney in Temecula can ask the court to order a reimbursement.
Should Spouses Hire a Divorce Attorney for Help With Debt Division?
The division of debt is a complex matter, and most spouses can’t handle it alone. It is in both parties’ best interest visit this website to speak to a divorce lawyer with the Law Office of Michelle Penna during these proceedings. A divorce attorney in Temecula can protect the client’s interests in an efficient, professional manner, and they can guide the client through the legal system.
