When divorce occurs, one of the top concerns that spouses have is how to divide the financial debts and obligations during the marriage, such as car payments, medical bills, the mortgage and credit card balances.
The division of assets and debts in a divorce varies by jurisdiction. Florida follows the equitable distribution doctrine. In the absence of a prenuptial agreement, that means that the court aims to divide up a divorcing couple’s assets and debts fairly instead of equally.
What becomes of divorcing couples’ liabilities?
The kind of debt you have can influence how it is divided. For example, credit card debt is generally the cardholder’s responsibility unless the card is in both of your names.
If you and your spouse own a home, selling it is often the easiest way to dispose of the mortgage (and give both spouses access to their share of the equity). If one party wants to keep the house, it will probably be necessary to refinance the mortgage into just that person’s name.
Auto loans are handled similarly. If you have a jointly-held car note, whichever party keeps the car usually has to refinance the loan so that the other party is legally cleared of the obligation.
These are, naturally, just examples. Some debts, like student loans that were taken out during the marriage and medical bills, can be more complicated to divide, and jointly held credit cards can also be tricky to divide.
Why you need to have a sound strategy to address marital debts
If you are in the process of going through a divorce and have joint debts and obligations with your former spouse, then you’ll want to understand your rights and responsibilities for handling them. You may wish to continue browsing our website for insights.