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Debts and Divorce

Typically debts are lumped in with property, in a divorce. They are included in the overall calculation and either divided in the same manner as the value and cash or offset by awarding both greater debt and a larger amount of property and cash to one party.

Debts, like income, are generally considered to be something that both spouses contributed to and benefited from during the marriage. In most states, debts incurred by and for the benefit of one spouse, such as for a vacation or hobby that only one spouse participated in, may be allocated to that spouse alone. Debts that appear to be incurred for the benefit of both parties, such as a house mortgage, that are only in one name are usually considered to belong to both parties. Debts belonging to one spouse prior to the marriage will remain the debt of that spouse in the event of a divorce.

Credit cards
In the event that a divorce is likely, all joint credit cards should be shut off. This can prevent many future problems such as one spouse running up high credit card debt that the other will ultimately be have to pay off.

Creditors
Even if the court divides debts between spouses, creditors may still pursue one party for the entirety of the debt if the other fails to pay.

Bankruptcy
When one spouse, or an ex-spouse, files for bankruptcy and the other does not, creditors may collect the entire debt from the non-bankrupt party.

Hidden debt
Divorces happen for many reasons, and many involve secret activities by one or both parties. These secret activities can get expensive and may involve significant debt that was unknown to the other party during secret activities, such as providing for a girlfriend or boyfriend during the marriage. Gambling debts may me another example.  Most courts will take this into consideration, even if the debt is incurred on a joint credit card, if the injured spouse can prove his or her ignorance.

Debts are involved in nearly all divorces. In many cases this issue can be settled between the parties, before going to court. In some cases debts can be a hidden monster that grows as more details come to light, and the situation can get very complicated, with a marriage that appeared to be in the black being deeply in the red.

If you are facing divorce, contact an experienced divorce attorney today.

 
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