Going Through A Divorce? What You Need To Know About The Division Of Debt
When a couple gets divorced, there are a lot of things that need to be sorted out – finances being chief among them.
How is the debt divided in a divorce? Who pays off the mortgage?
These are important questions that need answers.
The division of debt can be a complex process, as it involves not only determining who is responsible for which debts, but also how to divide up joint debts.
Unfortunately, there is no one right answer for everyone, as each situation is unique.
However, there are some basic principles that can help you get started.
When Going Through A Divorce How Is The Debt Divided Up?
There are just so many decisions to make when you and your partner are going through a divorce.
It can be hard knowing what first, but there is help available for that!
A collaborative divorce process can help couples stay away from the litigation of Court proceedings which ultimately saves them time and money along with any additional emotional trauma that could occur during the separation process.
How does the collaborative divorce process work?
A neutral financial expert is assigned to help you divide your assets and liabilities between the both of you.
The first step is to determine which debts are considered marital and which are not.
A list of all outstanding debts, including the name of the creditor, the account number, along with the outstanding balance needs to be presented to the neutral financial expert.
Once that has been established, the next step is to develop a fair and equitable division plan for those marital debts.
The neutral financial expert will help to divide the debt between both spouses by looking at the different ways each spouse earns money on average either annually or monthly through things like salary/wages and investments etc.
Then they analyze those findings to see which is closer towards what’s considered to be a “fair division” based on some parameters which they set prior to starting this process.
If the couple cannot come to an agreement on their own, the Court will make the decision for them.
In some cases, the Court may order one spouse to pay all of the debt, while in others, they may split it evenly between the two spouses.
Once the division of debt has been determined, each spouse should then contact their respective creditors to notify them of the divorce and arrange for payment.
No matter how the debt is divided, it’s important to remember that each person is still responsible for their own individual debt after the divorce is finalized.
If you’re considering a divorce, it’s important to understand the division of debt.
Make sure to consult with an attorney who can help protect your interests and ensure that you receive a fair settlement.
Have questions? Need answers? Contact me today!