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How is Debt Distributed After a Divorce?

By Saunders Law Group on January 20, 2015


When a couple enters divorce proceedings, “splitting up” becomes a very multifaceted phrase. Beyond the dissolution of the relationship, it becomes the overarching theme to a slew of questions that will occupy the next phase of the ex-couples lives: How will we split up time time with the kids? How will we divide our savings? Who gets the house? Although we usually think of the “big thing” first—children, real estate, money—it’s important to remember that splitting up doesn’t just apply to a couple’s assets. If you were married for any significant length of time, it’s very likely that in addition to accumulating assets, you accumulated some debt, too.

Florida is an equitable distribution state. Put simply, that means that any property acquired during the marriage—marital property—will be divided equally upon divorce. (You can learn about the differences between marital and non-marital property here.) According to Florida law, premarital debts (debts incurred before the marriage) and non-marital debts are not subject to division in a divorce.

Premarital debt is largely self-explanatory: if you incurred the debt before your marriage, then it’s your debt. Non-marital debt can be a little less obvious. Even if debt was acquired during the marriage, it could be considered non-marital if it is listed only in one spouse’s name, used as separate property and was not paid for using joint funds. Take, for example, a car that was purchased during the marriage. If the title only has one spouse’s name on it, and monthly payments were made from that spouse’s individual bank account, the debt is considered non-marital. Following divorce, the spouse whose name is on the title is fully responsible for that debt.

So, what about joint property? Any property purchased with joint funds or purchased for the benefit of the family is considered joint property. The same is true of any property under both spouses’ names—even if only one spouse contributed to the payments during the marriage. When the time comes to equitably divide marital debt, the court will take several factors into account. These typically include the duration of the marriage, the individual earning capacities of both spouses, whether or not one spouse contributed financially to the career or educational development of the other, and whether or not both spouses “contributed equally” to the marriage. It’s also important to note that asset, property and debt division are interdependent: a spouse that receives more of the debt might also walk away with more mutual assets as a form of compensation. Of course, if children are involved, their well-being will also be taken into account.

Even under the most amicable circumstances, divorce can be an extremely emotional process, but having the assistance qualified legal and financial counsel can make the transition a little easier. If you are considering filing for divorce, consult with the skilled attorneys at Saunders Law Group to discuss your unique situation. We’re here to help.

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