Divorce – How Marital Debts Are Divided
Divorce generally includes a number of aspects concerning the dissolution of the household and assets. Because state laws differ, the identification as well as the disposition of marital debt has remained somewhat ambiguous. However, debt remains a common element in most every relationship. Thus, the court system has been dealing with its ramifications for decades.
History and Theory
It has only been since the late 20th century that statutory provisions have been implemented in most states. The laws are general so the specifics will vary for each individual marital relationship and situation. The most widely held view pertaining to marital debt is that it is comprised of debt that incurred only during the course of marriage and for marital purposes. Even if you were to hire the best divorce lawyer in Orlando for example, you would still be advised that usually, debts incurred prior to the marriage or in the post separation period are the responsibility of the specific named debtor.
Marital debt is dealt with as marital property the same as with all other property and assets that is acquired during the marriage. Therefore, it is included within the context of the divorce process. The two types of debt are categorized as:
Usually, only what is considered as joint marital debt is divided by the judicial court system. As an example, a vehicle, home, piece of property or any other financial obligation incurred with the intent of both parties to benefit from it would be considered as joint marital debt.
Generally, there are two ways of dealing with marital debt during divorce proceedings:
Community vs. Equitable Property
The division of debt also depends upon if the parties reside in an equitable or community distribution state. Community property states mandate that each party is responsible for debt incurred during marriage regardless of whose name is on it. For instance, both parties are responsible for a home mortgage whether or not their name is on the mortgage documents. Equitable distribution states mandate that a party is only responsible for debts in their name. Therefore, marital partners should be careful when purchasing property that both parties should be responsible for paying. Otherwise, if one name alone is on that debt, he or she will be required to pay it off alone once divorced.
The above is just one very important reason to consult a divorce lawyer prior to and during a marriage. Divorce itself can be a very confusing time and the legal system very complex. Therefore, it is best to seek the advice of a competent lawyer to help navigate the process. He or she will ensure that all assets are divided according to the laws in the state where the parties reside.