How are Debts Divided in a New Jersey Divorce?
When couples go through a divorce, one of their biggest concerns often lies in the process of dividing assets between them. Throughout a marriage, couples can acquire a significant amount of assets, such as houses, cars, retirement plans, etc. However, they can also accumulate certain debt. This can include mortgages and credit card debt. When they go through a divorce, both assets and debts must be divided between both parties. Continue reading below to learn how this is done.
How is Debt Divided in a Divorce?
In New Jersey, both the division of debts and assets are handled with a process known as equitable distribution. This divides assets and debts based on what is fair and just. It is important to understand that this does not necessarily mean an “equal” split. While a judge will work to determine what is fair, the values that each spouse receives will not necessarily be identical.
What is Considered When Dividing Debt?
There are several specific factors that New Jersey courts consider when dividing debt in a divorce. This includes the following:
- The length of the marriage
- Both parties’ age and health
- Any income or property brought into the marriage
- Both parties’ standard of living
- Written agreements made either before or during the marriage
- Both parties’ economic circumstances after the division of property
- Both parties’ income and earning capacity
- Any contributions made by one spouse to the other’s ability to earn income
- Any contributions made that increased or decreased the value of the couple’s marital property
- The tax consequences of the proposed property distribution
- The present value of the property
- The need of a custodial parent to use the marital home
- The parties’ debts and liabilities
- The need for a trust fund to pay for medical or educational costs of a spouse or child
- Any delay incurred by one party in achieving his or her career goals
- Any other factors which the court may deem relevant
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