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What happens to property and debt in divorce?

On Behalf of | Apr 2, 2021 | family law

One unavoidable aspect of any divorce involves property division. No matter the circumstances that result in divorce, you and your spouse must divide up your assets. Though you and your partner may have ideas about who gets what assets, all divorcing couples must share marital assets equitably. That includes debts they acquire during their legal union.

The rules regarding property division are not easy for anyone who is not well-versed in divorce law to understand. The law requires the courts to look at both parties personal and marital financial obligations before dividing assets. To improve the likelihood of a favorable property division and divorce settlement consider the following concerns.

Debts and accounts

During your marriage, you probably acquired joint accounts with your soon-to-be ex-spouse. Ideally, you want to start paying down any joint debts or before filing for divorce. Divorce does not alleviate personal repayment obligations. Creditors can still pursue you for payment if your ex-spouse defaults or refuses to pay and ding your credit profile for delinquent accounts. To make it easier to separate your financial obligations, document every account and credit card that are separately and jointly owned.

Some spouses find themselves unevenly yoked debt-wise during their marriage. It is not unusual for one partner to acquire or owe more personal debt than the other. When determining divorce settlements, the courts must take into consideration the ownership and value of all other assets besides the marital ones. To prevent significantly lopsided or disadvantageous rulings, the courts equalize divorce settlements with property/marital debts to offset the total debt.