We all know that, during the divorce process, marital assets and property end up on the chopping block. However, just as spouses must split the fruits of their marriage, they must also divide any debts they incurred. If the thought of having your debts divided in court makes you anxious, there are other options. For example, if your debts are not too substantial, you and your spouse can try to pay them off before embarking on the divorce process. If not, the court will address this matter for you.
Dividing Marital Debts
New York is an equitable distribution state, which means that all marital property and debt must be distributed based on what is fair. In this context, fair does not necessarily mean equal. When dividing marital debt, the court will consider the amount of debt involved, how it was accumulated, and which party benefited most from it. The court will also factor in the amount of assets each spouse keeps and their ability to pay.
Oftentimes, spouses are concerned about having to pay off debts their spouse irresponsibly racked up in secret. In such cases, it is highly unlikely that a judge would assign any of this debt to you. In fact, it might even be considered a wasteful dissipation of marital assets and, to make up for the loss, you might receive a larger share of the pie when it comes to property and asset division.
Student Loan Debts
In New York, student loans are generally considered marital property, especially if a portion of the funds is used to pay household expenses or living costs. Moreover, since an advanced degree ultimately benefits both spouses and contributes to the earning capacity of the spouse who pursued it, it is also factored into a judge’s decision regarding alimony.
In some cases, spouses continue to jointly retain property, such as a home, to avoid incurring more debt or refinancing a mortgage. Make sure you and your spouse fully comprehend the tax implications of this decision and how you plan on distributing the assets if you ever choose to sell the property. You do not want to find yourself in a tricky predicament in the aftermath of your divorce.
Reach Out to an Experienced Family Law Attorney Today!
If you are getting a divorce, you are likely already aware of the numerous complexities involved in this process, especially when it comes to asset and debt division. At Family First Legal Group, our divorce team has the experience and knowledge necessary to help you navigate every step while protecting your interests. Our attorney is committed to providing personalized solutions to help you achieve your goals, so you can move forward into the next chapter of your life. You should not have to go through this emotionally draining process on your own.
Reach out to our law office today at (914) 752-5333 to set up a free initial case evaluation with our family law attorney to discuss the details of your case.