When it comes to equitable property distribution, most couples overlook the subject of sharing marital debts or liabilities during divorce. It is easy to discuss who gets to keep the home or the car, but what about the credit card debt, car loans and any other outstanding debt incurred during the marriage?
In the state of New Jersey, all assets and debts acquired by a couple while married are termed as marital property. Thus, in an event of a divorce, New Jersey divorce laws require there to be an “equitable distribution” of marital property. This means the property in question must be fairly (not equally) distributed.
So, what factors determine the distribution of marital debt in New Jersey?
In determining the equitable distribution of marital property, the divorce court must take certain factors into account. Here are some of these factors:
• The property or income brought into the marriage by each spouse
• The duration of the marriage
• The established living standards during the marriage
• Each party’s earning capacity
• The debts and liabilities of the individual parties
Some common types of marital debt
1. Credit card debt
This is one of the most common types of debt that must be discussed and settled during a divorce. Generally, both parties are liable for any debt that either party incurs during the marriage. When determining how credit card debt is distributed, the judge will need to consider who took the debt and who benefited from it.
2. Mortgage debt
If a couple owns a home during the marriage and has an uncleared mortgage, it is usually a good idea to sell off the home in order to settle the outstanding debt. However, if a couple has children, the judge may assign the home to the party that has custody of the kids. In this case, the party that is keeping the home will typically buy out the other party’s share of the home.
Divorce and debt require the attention and skill of an experienced family law attorney. Not only is your financial status at stake, but your emotional well-being and children as well. Working with a divorce lawyer can help you navigate these challenging times and turn a new page in your life.