The financial circumstances of married individuals inevitably become intertwined. They often share checking accounts and credit cards. They may apply for financing together when buying vehicles, real estate or other expensive assets.
For many couples, the biggest challenge during a Massachusetts divorce involves finding a way to separate financial obligations and resources. People often focus so much on their belongings that they don’t properly consider how shared financial obligations, like credit card debt, can impact the outcome of divorce proceedings.
Many debts are part of the marital estate
When determining what financial obligations play a role in property division proceedings, the date of acquisition and the intention will play a major role in determining whether the debt is part of the marital estate or not. Most debts accrued during the marriage will be subject to division along with any assets accrued during the same time. Even if the debt is in the name of one spouse, both may have shared responsibility to repay it.
However, it may be possible to exclude certain debts from the property division process. If one spouse can show that the other misrepresented their financial circumstances or took on the debt in an attempt at marital dissipation, then those specific debts may not play a role in property division proceedings. Debts intended to waste marital resources or incurred as part of an extramarital affair are among the financial obligations that the other spouse may not need to share.
How do couples split debts?
There are multiple ways to handle debts that are part of the marital estate during a divorce. Sometimes, one spouse will take responsibility for certain debts and the other will take responsibility for different accounts. Other times, the spouse with more income may absorb more debts but also retain more marital property. The solutions can be as unique as the marital resources themselves. People should be aware that there can still be financial and legal challenges related to marital debts even after the courts enter a property division decree if one spouse defaults on those debts or files for personal bankruptcy.
Properly addressing marital debt can be as important as negotiating an appropriate division of marital assets during divorce proceedings in Massachusetts.