When a married couple seeks a divorce their assets and any debt they’ve accumulated during the duration of their marriage will be divided. In New Jersey, equitable distribution is the process courts use to determine the division of marital assets and debts. This means the division of debt will be fair, not necessarily split 50-50. If you are seeking a divorce, contact one of our Experienced Mountainside Property Distribution Attorneys who can help you achieve a just division of debt.
How do courts divide debt in a divorce?
Several states use either community property or equitable distribution procedures to divide marital assets in a divorce. New Jersey is an equitable distribution state. In New Jersey, the division of assets and debts is based on what is reasonable and fair for each party. The process of determining this distribution is known as equitable distribution. Equitable distribution does not mean an equal split. It simply governs a just division. During litigation, a judge will decide what is considered marital and separate assets. This is done to ensure individuals do not need to divide their hard-earned assets incurred before marriage. In terms of debt, this ensures spouses are not required to pay for separate debts that were accumulated before the marriage or after the separation. Spouses are not responsible for separate debts their spouse has incurred. However, joint debt is to be divided in a divorce.
What considerations are taken into account when dividing debt?
As mentioned above, the courts only divide marital debt that was accumulated jointly during the marriage. Any debt incurred before or after the marriage is considered separate debt. However, the courts will still consider several different components when determining how to divide debt in a divorce. The following may be considered:
- The duration of the marriage
- Each spouse’s standard of living
- Each spouse’s income
- Each spouse’s earning capacity
- Each spouse’s age and health
- Each spouse’s economic standing after the division
- Value of present marital residence
- Whether or not there is a need for the custodial parent to keep the marital home
- Tax consequences of property distribution
- Whether or not there is a written agreement that was formulated before or during the marriage
- Whether or not a trust fund is needed to pay for medical or educational purposes for a spouse or child
- All marital assets and property
- This refers to assets accumulated during the span of the marriage.
- Each spouse’s marital and separate debts and liabilities
- Any other pertinent aspects of the case
If divorce is imminent, don’t hesitate to reach out to one of our trusted and dedicated team members. Our firm is committed to helping our clients achieve a fair division of debts in their divorce. We are on your side.