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Remembering debt while dividing property

On Behalf of | Jun 28, 2015 | Firm News |

When a Florida couple goes through a divorce, all of their assets are scrutinized during the property division process. Many spouses forget that their debts also play a role within that process, and that debt is also divided at the end of a marriage. Understanding how various forms of debt will be handled can help spouses make informed decisions when dividing property.

Each divorce is unique, but a general rule of thumb is that debts that were accumulated prior to marriage will remain the responsibility of the party who brought those obligations to the marriage, while debt that was accumulated during the marriage is subject to division within divorce. This is true regardless of how an account is structured, or which spouse is named on the account. For example, a credit card that is issued in only one spouse’s name will still be considered to be marital debt.

This can cause problems during divorce, especially if one spouse had no idea of the existence of one or more lines of credit, or did not know how much was being spent. In certain cases, if one spouse was spending excessive amounts of money or was taking on debt in a reckless manner, the court can rule that he or she is responsible for a greater share of that debt. This outcome, however, is far from guaranteed, and the court will consider a wide range of other financial factors before making such a ruling.

When divorce seems on the horizon, a Florida spouse would be well-advised to make an assessment of all debt held either separately or as a couple. Obtaining recent statements will help an individual understand exactly what is owed, and where money has been spent. Armed with this information, it is possible to meet with a divorce attorney to gain an estimation of how debts might be handled while dividing property.

Source: Time, “What Happens to My Debt If I Get a Divorce?“, Leslie Tayne, June 23, 2015

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