How Is Debt Split Between Spouses in a Divorce in New Jersey?
The divorce process can be complicated for many different reasons. When the spouses’ shared assets are split between both parties, shared debt is split too. Many people wonder how the division of debt is decided in a divorce. Read on to find out more about the divorce process in New Jersey or reach out to one of our Morris County NJ Divorce Lawyers today for legal advice!
HOW IS THE DIVISION OF DEBT DECIDED IN A DIVORCE?
In the divorce process in New Jersey, a judge determines how debt is split between spouses. First, the debts must be categorized as separate or marital because debts incurred before the marriage are the individual’s responsibility. Any debts incurred during the marriage are usually considered marital debts if they were incurred for the benefit of the marriage. While marital debt is intended to be divided fairly, this does not mean that debt is always split 50/50 between spouses. In New Jersey, marital debts must be split equitably, meaning the division must be reasonable based on numerous factors.
WHAT FACTORS ARE CONSIDERED WHEN DIVIDING DEBT?
New Jersey takes many different determinations into consideration when deciding how to divide the debt. The division of debt usually happens after the division of assets, which could also vastly alter the judge’s debt decisions. Based on the following factors, the judge can decide what is fair:
- Both spouses’ financial resources
- Length of the marriage
- Both spouses’ age and health
- Written agreements made before or during the marriage
- Present value of marital property
- Each spouse’s financial contributions to the property
- Tax consequences
- Both spouses’ standard of living
There are many other factors that could come into play. It all depends on the circumstances of the marriage.
WILL MY CREDIT SCORE BE AFFECTED BY MY SPOUSE’S DEBT?
Unfortunately, the answer is most likely yes. For joint credit card accounts, all parties are held liable for any debt incurred. To avoid damage to your credit score, you should pay off all debts with your spouse before the divorce process if possible. This will ensure you don’t have any lingering debts from your spouse. Some couples even choose to liquidate their assets (like selling property) in order to pay off debt before the divorce is finalized. This way they don’t have to worry about how the debt will be split.
If you’re in the process of a divorce, you’ll want a highly experienced divorce attorney on your side to guide you through the complexities. Contact Townsend, Tomaio & Newmark, L.L.C. for quality legal counseling with one of our talented and compassionate lawyers.