How is Marital Debt Divided During a Divorce?

Getting a divorce is never easy. Even if you don’t have children, you still have to divide your assets, which can often lead to an amicable divorce deteriorating into a vicious fight. While everyone focuses on dividing assets at first, they often forget that they have to divide their marital debt as well.

In the state of New York, all assets and debts acquired during the marriage are considered “marital property” and must be divided fairly between both parties. This includes any debt acquired by either spouse during the marriage, also known as marital debt. Sometimes, this can include debt from before the marriage started.

The family law attorneys at The Law Offices of Diron Rutty, LLC can explain what is considered marital debt and how it is divided in New York.

What is Marital Debt?

Marital debt is any debt accumulated by either spouse during their marriage. This can include credit card debt, mortgage loans, car loans, and even student loans. It does not matter if only one spouse’s name is on the debt account. As long as it was acquired during the marriage, it is considered joint marital debt.

If the debt was taken on before the marriage, or the creditor that the debt is owed to takes one spouse’s name off the account, it can be denied as marital debt. This would be an argument to make in court.

How is Marital Debt Divided in New York?

New York follows the “equitable distribution” model when dividing marital debt in a divorce. This is the same system used to divide property. This means that the court will attempt to divide a couple’s debt in a manner as fair and just as possible. They will consider various factors such as each spouse’s:

• Income
• Earning potential
• Assets
• Contribution to the marriage

It is important to note that “equitable” does not mean equal. It’s more likely than not that the division of debt will not be a 50/50 split.

Factors Considered in Dividing Marital Debt

Besides the factors mentioned above, New York courts also take into consideration other factors when dividing marital debt. These can include:

• The length of the marriage
• The age and health of each spouse
• How much each spouse needs to maintain the marital standard of living
• How much each spouse contributed to the acquisition and maintenance of marital property and debt
• Any prenuptial or postnuptial agreements between both parties

Divorcing couples need to provide as much information as possible about their financial situation to the court, including any debts incurred during the marriage.

Protecting Yourself from Marital Debt

One way to protect yourself from being responsible for your spouse’s debt in a divorce is by signing a prenuptial or postnuptial agreement. You can outline how you will divide your marital debt in case of a divorce. You can also protect any pre-existing debts either you or your spouse may have.

Additionally, both spouses need to keep their finances separate during the marriage and avoid taking on new debt without consulting with the other spouse first. This can help prevent any surprises and potential arguments during a divorce. Currently, if your spouse incurs a debt without telling you, you are still on the hook for it.

What Happens if One Spouse Refuses to Pay Marital Debt?

In New York, both spouses are equally responsible for all marital debt acquired during the marriage. This means that if one spouse refuses to pay their share of the debt, the other spouse may be held liable by creditors. In this situation, it is important to seek legal advice and potentially take legal action to ensure that both parties fulfill their responsibilities.

Contact Our Family Law Attorneys For Help Settling Your Divorce

Marital debt is one of many things you and your spouse need to handle during your divorce. It’s important to seek legal advice and communicate openly with your spouse to reach a fair and just division of assets and debts. This can help you settle your marriage as fairly as possible.

If you need an attorney with experience with these matters and situations, contact the family law attorneys at The Law Offices of Diron Rutty, LLC.