Going through a divorce is rarely a “feel-good” process, but some situations are more challenging than others. When the two parties involved in a divorce are unable to reach an agreement about issues such as the division of assets, child support and custody, or even whether to get a divorce at all, it is referred to as a contested divorce. The points of contention in contested divorces generally require intervention through the court system.

The division of a couple’s debts is one of the most difficult discussions in a contested divorce. Money issues are frequently a contributing factor in a marriage dissolving, so it’s no wonder that outstanding bills are cause for disagreement. Much of the question about dividing up debt pursues an answer as to when the debt was incurred. If a debt existed in one of the partners’ names before the marriage took place, it will generally remain with that individual. By contrast, debts that are acquired after the marriage takes place is generally considered a shared debt, even if it is only in one of the spouse’s names. This means that it will need to be part of the equitable distribution process in which assets and liabilities are calculated and divided in half. One exception to this is when there is a prenuptial agreement in place that specifically addresses the issue of division of debt.

When the court makes a decision about dividing marital debt, there are many aspects of the situation that need to be considered. For example, if a debt is in one person’s name and legally needs to remain that way but is considered marital, there will likely be an offset of property to make up for the debt remaining in that individual’s name. Other considerations include earnings capacity and the financial status of each partner both before and during the marriage, who is responsible for incurring the debt and whether that individual gained more benefit than the other, whether the debt was incurred with the other spouse’s knowledge, and more.

If you are approaching a divorce, it is best to eliminate debt before the process, but that’s not always possible. If you need assistance in reaching an agreement with your spouse or need representation in a divorce proceeding, contact Reinherz Law to set up a convenient time to meet.