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Debt and debt division: Don’t ignore this detail

On Behalf of | Sep 17, 2018 | Firm News

When going through a divorce, you’ll spend a good amount of time thinking about property division. This includes asking questions such as:

  • Who will get the family home?
  • What happens to retirement benefits?
  • What’s the best way to handle cash in bank accounts?
  • How can you ensure that separate properly isn’t included in the divorce settlement?

While matters of property division are extremely important, you must also make note of any debts you share with your soon to be ex-spouse.

If you don’t divide debt in the appropriate manner, you could find yourself facing more challenges than necessary as you move through divorce and start your new life.

Here are some things to think about:

  • Separate vs. marital property: Don’t wait to make a list of property you brought into the marriage and property you purchased together. Also, you may have to fight to keep separate property out of your divorce settlement. If you have a pre-nuptial agreement it’s typically easier to do so.
  • Some debt will require division: No matter how hard you try to avoid it, it’s likely that you’ll have some debt that comes to light. For example, maybe you have a joint credit card with the other individual. Or maybe you purchased a home together and still have a mortgage. Accounting for every debt is critical, as failing to do so can result in additional financial challenges down the road.
  • Protect yourself against more debt: Once you file for divorce, take action on any joint accounts you opened with the other person. An example of this would be a joint credit card account. You don’t want to leave it open, as this allows the other person to run up more debt that you may be responsible for. All joint accounts require your full and undivided attention.

Debt is just as important as assets

Everyone wants to focus their time and energy on fighting for the family home, vehicles and other personal assets of value. While it’s okay to focus on matters of property division, you can’t do so at the expense of overlooking your debts.

With a list of all debts in front of you, it’s easier to move forward with your divorce with a clear head.

As long as you know how to protect your legal rights, you can devise a strategy for settling your divorce as quickly and efficiently as possible.