Divorce can be a very complicated time, even when both parties are trying to keep things peaceful. After custody issues have been established, the hardest part of a divorce is usually dividing the debts. In many cases, money was the actual cause of the divorce, and when it is time to divide the debts, many fingers start pointing and the shouting match begins.
There is, however, an easier way to divide the debts of the marriage. It will take a little time, a little patience and the help of a good attorney familiar with family law. The following steps should be taken, in accordance with your state laws, to divide the debts in a fair manner:
Create a list of all debts
This will include joint accounts, separate accounts, medical bills, student loans, repair bills, and any other debts that are currently being paid. Our divorce attorney’s at www.orlandodivorceteam.com advise you make a list of account numbers, balances and use of the account, such as this credit card was used to purchase furniture for the home.
Any debts that are solitary accounts that were in the possession of the person before the marriage will remain with that person after the divorce. These debts should be removed from the list and placed with the responsible party.
Priority of the joint debts
Pay off what you can
Determine if any of the debts that you as a couple currently have can be paid off and closed from the joint marital assets. In many cases, small credit card debts and personal loans can be eliminated from the divorce proceedings by selling off joint assets and paying off the debt.
Divide debts and assume responsibility
When looking at the remaining debts, determine who will benefit from the account and who will have control of the debt once the divorce is final. If one party is keeping the home, they should assume responsibility for the mortgage. If the other is keeping the car, the car loan becomes their debt. This will take time and patience to determine, and will take effort on all parties to be fair.
Put it in writing
Create a final document that states the responsibilities of each party and have them reviewed by both attorneys and finalized by the court.
Try To Divide Your Debts Amicably
Of course, things do not always work out this easily and the lawyers must become involved in the process. While this helps things work out in the end, it also delays the divorce and extends the animosity felt by all people involved. The best way to divide debts in a divorce proceeding is to approach the subject calmly and rationally. If this cannot be accomplished because the parties are unable to communicate, it will have to be completed by the attorneys.
If You Default On Your Debts
It is important to remember that debt from a divorce must be paid according to the divorce decree. If one of the former spouses fails to repay the debts and the other spouse is damaged from this action, the non-paying spouse can be brought before the court to explain why their debts are not being paid. This is a scenario that you will wish to avoid.
After all is said and done, the best debt is no-debt, and divorcing partners should strive to eliminate all their joint debts before entering into divorce proceedings.
This article was written by Georgina Clatworthy, a freelance writer who regularly writes on topics relating to law, finance and consumer issues. She contributes this article for www.orlandodivorceteam.com, a team of lawyers who have many years experience handling divorce cases. It is always better for both parties to try to reach an amicable agreement in divorce, however if this is not possible then hiring a competent attorney is the best way to ensure you both leave the marriage with an equal division of assets.