Dividing debt can be one of the most stressful aspects of a divorce, and if you’re going through this process, understanding how things work can help protect your financial future. Here is how it goes.
The first step in dividing debt is separating marital and personal debt. Separate debt consists of debts you had before the marriage. These will remain yours and will not be split upon divorce.
Marital debt, on the other hand, collectively refers to all financial obligations incurred during the marriage, regardless of whose name is on it. They include credit card debt, home mortgages, auto loans, medical bills and business debts.
Equitable distribution laws in Georgia
Marital debts, just like assets, are divided equitably. It means courts strive for fairness rather than equal portions between the divorcing parties. Factors such as each spouse’s income, contributions to the marriage, and ability to pay the debt will influence the decision, if it has to be made by a judge.
Protect yourself during the process
Taking proactive steps can help avoid being burdened with more than your fair share of marital debt post-divorce. For example, you do not want to share a loan your spouse took for personal use, like gambling or individual pursuits.
Similarly, if your spouse maxed out credit cards or took on debts in bad faith just because the end of the marriage was inevitable, you should not take it lying down. You can bring it to the court’s attention for consideration during the division of marital assets and debts.
Gathering evidence, understanding your rights and seeking qualified legal assistance can help you handle the situation and ensure you are not treated unfairly. This can go a long way in securing your post-divorce financial future and achieving a fair divorce settlement.