When going through a divorce, one of the least enjoyable parts of legally separating is figuring out who will be responsible for what debt. Mortgage payments, credit card debt, car loans, and more must be sorted out during this challenging time, but it doesn’t have to feel overwhelming. Understanding the laws around how debts are divided can help you and your soon-to-be ex come to an arrangement that works best for you both.
The Court’s Decision
New York is an equitable distribution state. This means that marital property and debts are divided in a way that is considered fair between both parties. This does not necessarily translate to a 50/50 split; instead, the court will consider several factors when dividing debt.
One of those factors will be whether either of you owns any pre-marital assets. It is important to remember that if one spouse is found to have premarital debts or assets, then those will not typically be divided as part of the divorce proceedings.
Another factor the court will consider is each spouse’s contribution towards any joint debts or assets acquired during the marriage. This includes considering who purchased the item, who made payments over time, or who paid for repairs or upkeep related to the asset. This factor largely relies on having detailed records from both parties so that each spouse’s contributions can be accurately tallied and considered when making decisions about debt division during divorce proceedings.
The court will also consider each spouse’s respective income following divorce and their ability to manage repayment plans for joint debts after separation. This is an essential consideration because while some spouses may be able to pay off their share of joint debts quickly after separation, others may struggle due to limited income when taking on sole responsibility for repayment afterward.
Ensure Debt is Divided Fairly
The best way to ensure that any debt division arrangement works best for both parties is through negotiation with each other and/or a third-party mediator if necessary. In writing, you should document your agreed-upon terms and conditions, including who will be responsible for which debts and when payments will be due. If either party fails to follow through with their obligations or pay back their portion of the debt, then they are legally liable for the entire balance owed.
If you have questions about how your debts should be divided during a divorce, contact Hedayati Law Group P.C. for more specific guidance regarding your unique situation. Our Long Island divorce attorneys have years of experience helping couples navigate through complicated financial matters related to divorce proceedings, including asset division and debt settlements. Let us help you make informed decisions during this difficult time — contact us online or by phone to get started. (631) 880-6440