Dealing with Debt at Divorce
Divorce calls for couples to divide their property during divorce. It also requires division of debt.
Research suggests disagreements about money are the leading predictor of divorce in the United States. Arguments about money can sour a marriage and make divorce difficult. When money is an issue during marriage, debt is oftentimes involved.
Common forms of debt carried by many couples include:
- Credit cards
- Home equity loans
- Car loans
- Tax liabilities
- School loans
In New York, assets and liabilities are subject to equitable distribution. Just as value acquired by a couple is part of their marital estate, so is debt. Questions arise when debt is incurred from gambling, secret investments or the use of marital funds to support an extramarital affair.
Typically a couple may have a joint account or separate credit cards used for personal and household expenses. Unless it can be otherwise shown, this type of debt is often equitably divided.
If you have debt and are considering divorce, think about the following steps:
- Try to eliminate as much debt as possible prior to divorce. It is easier to get a fresh emotional and economic start after divorce if you are not saddled with debt.
- Close joint checking accounts at the outset of divorce.
- Close unused credit card and other unneeded accounts.
- Depending on your long-term objectives, speak with your divorce attorney about reducing your debt load during negotiations for marital assets.
To stabilize your financial future, eliminate or reduce debt before, during and after divorce. When you need strong legal representation on property division and other issues of divorce in New York, call us at Bryan L. Salamone and Associates, P.C.