If you are thinking about getting a divorce, you may be concerned about how this will impact your finances. Divorces can be costly, from legal fees to dividing bank account money to paying child support and spousal maintenance. Aside from property division, you must split your debts. Debts incurred through the marriage are usually considered joint liabilities and must be split equitably during a divorce. During proceedings, courts will examine various factors when determining how to distribute debts fairly. A Turco Legal divorce attorney can help you reach an agreement about how to divide both liabilities and assets.
Divorce can have both financial and emotional impacts on the parties involved. If you are worried about the financial impacts of your divorce, an attorney can help.
Debt Division in Massachusetts
The state of Massachusetts follows the equitable division rule, which splits marital assets and debts fairly or equitably. First, the family court will determine which property is marital or separate. In general, all assets and debts can be marital or separate property. Marital property includes interests, items, and belongings obtained by a couple during marriage, including debts. Meanwhile, separate property is anything acquired by a couple before marriage or inherited or gifted to them. Also, couples in the state can designate some debts or property in a prenuptial agreement.
As with property, debts can be marital or separate. In general, marital debt is acquired during the marriage and utilized for marital purposes. After the court has identified marital debts, they will split them fairly, which may not be 50/50. For instance, if a spouse accumulates significant credit card debts on personal expenses during the marriage, they may have to pay a greater portion of this debt.
Common Kinds of Debts that Will be Divided in a Divorce
Divorcing couples in Massachusetts may need to determine or let a court determine how to divide any of the following debts:
- Mortgage. Often, the family house is a marital asset, so it can be the liability of both spouses. If a couple owns a home together, a mortgage may still need to be paid. If the house is titled in the names of both spouses, and the names of both spouses are in the mortgage, this debt is considered marital and must be divided equitably. A couple can decide to have one spouse buy out the other’s interest in the house. If only the name of one spouse is on the mortgage and title, the court will examine different factors to figure out liability for debts related to the house. For instance, if the spouses lived together in the family home and took out an equity line of credit for a renovation project, this debt can be a joint liability.
- Car loans. If you purchased a car with an auto loan during your marriage, this debt may be joint, especially if both of your names are on the loan. In this case, your options include selling the care, paying off the balance, and refinancing the loan to eliminate one spouse. If the loan was taken out before the marriage, it may be a separate debt.
- Student loans. In general, this type of debt is separate. The party who took it out is solely responsible for it. But if one spouse took out a student loan for household expenses, the debt can be marital.
- Credit card debt. This debt, when incurred during marriage may be a shared debt. But if the debt was run up before marriage, it would be a separate liability.
- Medical debt. If this debt is acquired during marriage, it may be divided equitably during a divorce. But medical debt acquired before marriage or after separation may be separate debt.
