In our modern society, carrying some form of debt is almost a given. Whether debts come in the form of student loans, personal loans, car loans, credit cards, mortgages, or one of many other sources, the average American household carries substantial debts during marriage. This leads many clients to question: how exactly are my debts divided during divorce?
Monmouth County, NJ Debt Division Attorneys Define Equitable Distribution of Debt
Debt is considered eligible for distribution or division pursuant to New Jersey regulations. Much like any other asset or liability to be equitably distributed during a divorce, your Monmouth County debt division attorney must first help you to determine whether or not your debt is considered marital property. In the most general sense, marital property is considered any property acquired during a marriage.
If a debt is marital property, it must be divided equitably (fairly) alongside other common assets such as owned real estate, businesses, retirement assets, investments, etc. Debts which were accrued before or after a marriage will likely not be eligible for distribution. However, if both spouses contributed to a debt during the marriage, it may be determined that the debt is marital property despite it existing prior to the marriage.
Red Bank Debt During Divorce Lawyers Find a Solution to Debt Division
If your divorce includes dividing accrued debts such as mortgages, loans, credit card debts, and more, your Red Bank debt during divorce lawyers may be able to help with any of the following solutions.
Paying off Existing Debt – Eliminating debt before a divorce is finalized is often the most desirable outcome. This allows each individual to begin their new life as an independent adult without the burden of existing debts hanging over their heads. It also leads to a much cleaner divorce agreement in many cases.
Using Marital Assets to Pay off Debts – If you and your spouse do not have the liquid funds available to pay down your debts, it may be a viable option to sell existing assets to do so. Again, finalizing a divorce without any debt-related strings attached is a bonus.
Using Debt as a Bargaining Chip – In some cases, a spouse may be willing to assume the full burden of a debt in order to retain other marital assets. This may or may not be a good option dependent on your circumstance.
Dividing Debt Into New Accounts – It is critical to understand that banks, creditors, and other financial institutions do not care whether you and your spouse are married or divorced. If your name or social security number are attached to a debt, it belongs to you. Therefore, in the case where debts must be divided during a divorce without being paid down, it is a great idea to have new accounts opened in your individual names.
Declaring Bankruptcy – Finally, the option of declaring bankruptcy is on the table. While this may not sound appealing, it can be the best solution in some circumstances.
Contact our West Long Branch Debt and Divorce Attorneys Today
The debt and divorce attorneys of Chamlin, Rosen, Uliano & Witherington have extensive experience serving clients from local Monmouth County communities such as West Long Branch, Howell, Red Bank, Freehold, Asbury Park, Middletown, and all of Central New Jersey. Our firm is dedicated to offering family oriented legal services, and we will take the time to understand how we can tailor our solutions to best meet the needs and concerns of our clients and their families. By placing the attorney-client relationship first and foremost, we routinely retain our clients for life.
To learn more about how your debts may impact your divorce settlement, please contact us online or contact us through our West Long Branch, NJ office by calling (732) 440-3950 today for a free and confidential consultation.