Marital Debts After Divorce
When a marriage ends in a divorce, there can be financial consequences well beyond the costs associated with alimony and child support. There can be liability for marital debts that continues for years after a marriage ends, affecting the financial health of the divorcing spouses. It is therefore very important to understand the impact of a divorce on your liability for marital debts. With understanding comes an opportunity in some instances to engage in planning. However, if you have been taken by surprise, you can still take measures to protect your short- and long-term financial interests. In the various situations that may present themselves, time is of the essence, and Bergen County divorce lawyer Howard B. Leopold can assist you. Leopold Law offers advice and representation to residents of communities throughout Northern New Jersey. We can work with you to develop a plan of action that is tailored to your particular financial circumstances.Marital Debts After Divorce in New Jersey
Under New Jersey law, marital property is subject to equitable distribution. The distribution of marital property applies, generally speaking, to both assets and liabilities that a couple acquires while married. In many cases, there is more debt coming out of a divorce than cash on hand to pay it. Equitable distribution of marital property, including marital debt, need not be an equal distribution. In other words, courts are not obligated to divide marital debts after a divorce on a 50/50 basis.
Among the marital debts that a couple may incur while married and divide up as part of a divorce is credit card debt. Liability on credit card debt is a leading cause for the filing of individual bankruptcies post-divorce. In some unfortunate scenarios, the bankruptcy of one spouse can result in the other spouse’s liability for sums of money that are unmanageable and trigger their own bankruptcy. As a result, it can be advisable to close credit card accounts to limit liability, depending on the circumstances of the divorcing couple, and to take other steps to limit exposure.
There can also be home mortgage debt, which may be greater in amount than credit card debt and other financial obligations. In some cases, it may make sense to sell off a home that was once shared to help address liability on the underlying mortgage(s) and other liabilities, including credit card debt. However, this is not always possible.
Another fairly common type of debt is student loan debt. This is one example of a debt that can be a “separate debt” if it is incurred by a spouse prior to the marriage. Student loan debt can also be incurred during the course of a marriage. The distribution of liabilities arising from taking student loans can present complicated situations in which the debt covered living expenses in addition to covering tuition or funded the education used by a spouse following graduation. Liability on student loans can affect alimony payments. It can be factored into the overall allocation of debt, with the arrangement dependent on the circumstances of the divorcing couple.Hire an Experienced Bergen County Attorney to Protect Your Finances During a Divorce
Whether your spouse and you are working out arrangements amicably or not, it is important that you understand the financial consequences that can result from a divorce, including liability for marital debt following the divorce. If you have questions about marital debt after a divorce, call us at (201) 345-5907 or contact us through our website for a free consultation with a Bergen County lawyer. Attorney Howard B. Leopold can help at any stage at which you find yourself addressing the financial consequences of your divorce. Leopold Law can guide people throughout Bergen, Essex, Passaic, and Hudson Counties, including in Hackensack, Englewood, Bergenfield, Cliffside Park, Dumont, Fair Lawn, Fairview, Fort Lee, Franklin Lakes, Garfield, Glen Rock, Hasbrouck Heights, Edgewater, Elmwood Park, Hillsdale, Little Ferry, Lodi, Lyndhurst, Mahwah, New Milford, North Arlington, Oakland, Palisades Park, Rutherford, Saddle Brook, Teaneck, Paramus, Ramsey, Ridgefield, Ridgefield Park, Ridgewood, River Edge, Tenafly, Wallington, Westwood, Wyckoff, Jersey City, Paterson, and Newark.