What is Debt?
Debts, obligations, and liabilities are also an issue that needs to be addressed and resolved as part of your divorce action. This generally refers to debt such as credit card debt, student loans, etc. that are NOT associated with an asset such as a mortgage or vehicle loan.
🤔 Understanding how Debt affects your divorce.
Debt acquired during the marriage is usually treated as a joint responsibility. Debts acquired by one spouse but which benefited the other spouse during the marriage may also constitute marital debt. You and your spouse will need to make the identity of each debt clear. You will also need to determine the present value of your debts to help you determine how to divide the marital debt between you.
During their 9-year marriage, Jerry and Sally have managed to remain mostly debt-free. However, over the past few years, Jerry has taken up an expensive hobby and incurred $2388 in credit card debt to support his new hobby. Even though both of their names are on the credit card account, Jerry understands that he’s the one that benefited from the debt so he agrees to assume the debt and to work with the credit card company to remove Sally from the debt.