As a marriage is ending, the divorcing couple will likely be concerned about numerous aspects of the future – financial or otherwise. The prospect of dividing the buying power of one household into two can be frightening for many people. A marriage that has lasted years will likely have accrued numerous assets and debts that all must be thoroughly examined to reach an equitable split during the divorce.
When considering divorce, most people will immediately recognize the challenge of dividing property. Assets like the matrimonial home, vehicles, a family business or retirement accounts must be properly valued and split to reach a fair compromise while also accounting for child support and spousal maintenance. Unfortunately, the division of finances is often complicated by shared debt.
- Credit card debt: Credit card debt will likely fall into two different categories. Over the course of a marriage, it is not uncommon for spouses to keep separate cards as well as joint cards. Most likely, each party will be responsible for their own separate cards, but the joint cards will have to be examined and split. Most often, both parties will share responsibility for paying back the joint credit card debt.
- Mortgage debt: Divorcing couples will likely face three options regarding the matrimonial home. They could sell the house and split the profit. One spouse could “buy out” the other spouse to maintain control of the property. Both spouses could move out and use the property as a rental, splitting the profits. Each option carries benefits and risks and every couple must determine what their ultimate goal is.
- Auto loan debt: In many ways, the division of car loans is like a combination of the previous two points. It is possible that only one party’s name is on the loan, but what if that purchase was made based on the future buying strength of the marriage. What if both spouses shared the use of the vehicle even if only one name is present on the loan?
- Medical debt: Based on the rules of the state, you might be forced to pay your partner’s medical debt. Working with an experienced lawyer is wise in these situations as the answers can be somewhat complex.
It is crucial for divorcing couples to carefully examine all these factors when creating their individual financial futures. Factors such as assets, debts and support all end up working together to reach the proper compromise. Don’t hesitate to work with a skilled family law attorney when proceeding through your divorce to ensure your goals are met from start to finish.