Dividing Marital Debts in Divorce
Prior to the recession, dividing assets was often the primary property division concern in Florida divorces. In the past several years, however, many households in our state and across the U.S. have taken on numerous debts due to a spike in unemployment rates, underemployment, rising prices, or simply to cover basic household expenses. Keeping in mind that financial troubles are a leading cause of divorce, you can imagine that many more divorcing couples have to face the reality of dividing a significant amount of debt.
It should not come as any surprise that each spouse will likely work to avoid as much liability for marital debts as possible and, for this reason, debt division determinations may become particularly contentious. If you cannot come to an agreement, the court may step in and tell you how the debt will be equitably distributed. An experienced Boca Raton divorce lawyer will know how to negotiate debt division issues and stand up for your best interests.
Common Types of Marital Debts
When most people think of debt, they tend to immediately think of credit cards. However, married couples often have many different types of debts, including the following:
- Home equity lines of credit;
- Credit cards;
- Auto loans;
- Installment loans;
- Student loans;
- Unpaid medical bills;
- Unpaid tax liabilities; and
- Business debts for which a party is personally liable.
First, divorcing couples must identify all debts and other liabilities that may be at issue. The second step is determining which debts are separate and which debts are marital. Under Florida law, only marital debts are required to be equitably distributed between the spouses in a divorce. Many people may believe that marital debts are simply accounts that are in both names, while separate debts are accounts that are in only one name. Unfortunately, it is often not that black and white.
Under Florida law, credit cards and other debts incurred during the marriage are considering to be marital debt, even if the account is only in one spouse’s name. Even if you were not aware that your spouse was building up piles of debt during your marriage, a court may still hold you partially responsible for the repayment of that debt.
Another concern regarding marital debt is whether your spouse will uphold their repayment obligations following the divorce. A common scenario occurs when a couple has a joint mortgage and one spouse agrees to take over the full mortgage payment in order to stay in the home. That spouse may not have the ability or financial qualifications to completely refinance the mortgage in their single name, and therefore the mortgage will remain a joint account. If the spouse responsible for the payments falls behind or stops paying, the mortgage company can come after the other spouse whose name is still on the loan. This often occurs with student loan debt that is in two names, as well.
As you can see, there are numerous concerns you must consider when facing marital debt division in a divorce. Fortunately, an experienced Boca Raton divorce attorney can assist you in settling marital debt matters. If you are considering divorce, call the office of lawyer Alan R. Burton for assistance today.
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