What Happens To Debt After Divorce?
No one wants to be responsible for paying off another person’s debt, and this is especially true for ex-spouses. So, what happens to any marital debt after divorce?
Separate vs. Community Property
The key consideration for the division of all assets after divorce is whether they are separate or community property.
Separate property refers to any assets or property acquired before the marriage. For example, if the wife purchased a car before the marriage, she has sole rights to that car.
Community property is anything acquired during the marriage. A common example of this is a house that the couple purchased together and lived in.
It is important to identify if the debt is separate or joint. However, some debts accrued during the marriage may be considered separate debts and the other spouse may not be responsible for them.
Examples of this may include:
Shopping for personal items
Expenses from an extramarital affair
However, each spouse can be liable for any marital or joint debt.
Joint debt can include:
Credit card debt from a joint account
The courts will pay close attention to the expenses to ensure that neither spouse is saddled with debt for purchases they did not make or benefit from. It is crucial to provide proof of any separate debts so there is no confusion about how they should be divided between the two of you.
Will Joint Debt Be Divided 50/50?
New York State focuses on the equitable distribution of assets, which doesn’t necessarily mean equal. Instead, the courts will look into the source of the debt and when it was accrued in order to fairly determine who should be held responsible for paying it.
One common way that marital debt is divided is that whoever gets more property will be responsible for paying off more of the debt.
New York City Divorce Attorneys
The division of property after a divorce can be complex. At Eiges & Orgel, PLLC, our attorneys can help fight for your best interests. Give us a call today at (347) 848-1850 to set up an initial consultation.