How is Marital Debt Divided in TN?
10 July 2022IN: Divorce
Some couples will come to divorce with a significant amount of debt, including a mortgage, car loans, credit card bills, and other financial obligations. Just like marital assets, this debt needs to be divided fairly when a couple is divorcing.
What Happens to a Couple’s Debt When They Divorce?
Under equitable distributions laws, the divorcing couple must divide both their marital property and their debt. But this depends on whether the couple acquired the property and debt during the marriage or it was acquired by one party outside the marriage.
Non-marital debt is debt that was accrued before the marriage or after a separation or divorce. The court may also, under certain conditions, consider some debt non-marital if it was incurred by one spouse, but not for the benefit of the household. When debt is acquired by one spouse and not considered marital debt, the spouse who acquired it will remain responsible for it.
What the Court Considers When Dividing Marital Debt
When a couple can’t come to an agreement regarding the division of their debt, the court will make this determination. There are many ways that the court attempts to make the division a fair one. While it is difficult to divide debt between parties, they will make accommodations whenever necessary, sometimes awarding marital property to one spouse in exchange for paying a marital debt.
The court will consider many things when making debt distributions, such as
- Whether one spouse or both incurred the debt
- What the purpose of the debt was
- Who benefited from the debt
- Whether the debt is attached to an asset such as a home or car
- Who is best able to financially pay the debt
- Whether there were other matters involved in the debt, such as infidelity- -
Just like marital asset distribution, the court will often consider many things about the couple to make the distribution of both assets and debts as fair and equitable as possible.
How is Joint Debt Handled in a Divorce?
When joint debts are divided in a divorce, if both individuals’ names are on the debt, they are both ultimately responsible for payment. Consequently, even if one spouse is ordered to pay the debt but does not, the other individual can still be legally liable to the creditor.
When debts are divided, it is typically best for spouses to remove each other’s names from the debts and accounts that are held jointly and hold them individually in the person’s name who will be responsible for its payment. Paying off joint debts and opening separate accounts is another way of ensuring that you won’t be responsible for them after the divorce.
Before You Get to This Point
When you are considering a divorce, it is best to do a preliminary credit check on yourself to ensure that you are aware of all the debt for which you are currently responsible. This will also confirm that your spouse has not taken out any other obligations in your name.
Moving forward, you should carefully monitor your accounts to make certain that your spouse is not incurring more debt for which you may ultimately be responsible. Protecting yourself financially is always one of the key issues in any divorce, and it may require you to be a bit of a detective.
Getting Legal Advice From a Murfreesboro Divorce Attorney
Money has a way of making the friendliest of divorces quickly contentious. If you take proactive measures, you will be less likely to have surprises in the end.
Divorce can be a highly emotional and confusing time. Getting the guidance of a skilled Murfreesboro divorce lawyer can afford peace of mind during one of the most difficult times of your life. At The Law Office of David L. Scott, we are with you each step of the way. Call us at (615) 896-7656 or contact us through our online contact form to schedule a consultation.```