What Happens to Debt in My Divorce?
What happens to debt in Monmouth and Ocean County Divorce Cases?
Helping clients facing debt in divorce across the Jersey Shore in Wall, Brick, Sea Girt, Manasquan, and Toms River
As more and more Americans use debt to pay for their expenses both large and small, the question of “what happens to debt during divorce?” becomes more and more relevant to anyone going through a divorce in New Jersey.
While debt is treated much the same way by the courts as other marital assets when it comes to the equitable distribution process, credit card companies and certain other lenders are not bound by court orders regarding the division of debt. This makes it that much more important that you speak with your Ocean County divorce attorney regarding how to best divide your debt during divorce, and how to ensure that you are protected financially moving forward.
Marital Debt and Individual Debt in Point Pleasant Divorce Cases
The first step in dividing debt during any divorce is to determine which debts belong to the marriage, and which debts are individually owned by the parties. However, this process is not as simple as saying “this debt is solely in your name, therefore that debt is not marital”.
Many times, while one party or the other may have used a credit card which was in their name to make a purchase, if that purchase was made in order to provide some necessity for the family, then that debt will most likely also be considered a marital debt even though it is in the name of a single individual. So if one spouse puts the month’s groceries on their private credit card, if that debt still exists at the time of the divorce, it will most likely be considered a marital debt, making both parties equally liable for its payment.
When deciding which debts are marital debts, and which debts are individually owned debts, it is important that you work with a Point Pleasant division of assets attorney who has experience handling complex financial matters during divorce so that you can better understand your unique situation, how your debts can affect your divorce settlement agreements, and to help you ultimately secure a fair division of assets agreement which protects your interests, and allows you to set the foundation for a successful financial future.
Why You Should Pay Off Marital Debts During Your Ocean County Divorce
Once you and your attorney have identified all marital debts, you could then theoretically begin the process of dividing them between you and your spouse. Critically however, credit card companies and certain other lenders are not bound by any court ordered or court approved division of asset agreement, meaning as long as the debt was originally incurred in the name of both parties, those lenders are free to go after both parties for repayment of that debt, even if one party or the other has expressly been given responsibility for that debt as part of their divorce settlement agreement.
In other words, even though your former spouse has agreed to repay some portion of your joint-credit card debt (most likely in exchange for some other asset of roughly equal value), there is nothing stopping the credit card company from hold you responsible for that debt, potentially ruining your own credit card score over debt which you didn’t expect to have to repay.
Pay off as much jointly incurred debt as possible…
For this reason, financially savvy divorce attorneys will usually recommend that divorcing couples pay off as much jointly incurred debt as possible in order to avoid exactly this kind of situation. While this many not always be possible, it is still highly recommended that you discuss all of your options for paying off marital debt with your Ocean County divorce attorney before agreeing to a division of asset settlement which may leave you unexpectedly financially vulnerable moving forward.
Contact A Brick, NJ Divorce and Marital Debt Lawyer Today
At the Bronzino Law Firm, we have extensive experience helping our clients to fairly and equitably divide all marital assets and debts during divorce in towns across New Jersey and Ocean County, including Point Pleasant, Toms River, Spring Lake, Sea Girt, Jackson, Wall, and Brick.
Attorney Peter Bronzino firmly believes in working closely with each of his clients, and that by keeping them highly informed and involved throughout the legal process, he can better work to achieve the results that best meet the needs and concerns of his clients and their family’s unique situations.
To speak with Peter Bronzino and our legal team today in a free and confidential consultation regarding your divorce, your unique needs or concerns when it comes to how to divide marital debt during divorce, or any other family law or divorce related issue such as a child custody matter, child support, or alimony, please contact us online, or through our Brick, NJ office at (732) 812-3102.