Divorce can be a difficult process, both emotionally and financially. One of the biggest challenges that couples face when getting a divorce is the division of marital assets and liabilities, including debt. In New York State, the courts follow the principle of equitable distribution when dividing marital property, which includes both assets and debts.
Equitable distribution means that marital property should be divided fairly but not necessarily equally. This means that the court will consider a variety of factors to determine how to divide the marital assets and liabilities between the two parties. These factors may include the length of the marriage, the income and earning capacity of each spouse, the contribution of each spouse to the acquisition of marital property, and any other factors that the court considers relevant to the case.
In New York State, marital debt is generally considered to be any debt incurred during the marriage. This can include credit card debt, student loans, car loans, and mortgages. However, there are exceptions to this rule. For example, if one spouse incurred debt before the marriage, that debt may be considered separate property and not subject to division in the divorce. Additionally, debt that was incurred for purposes unrelated to the marriage, such as a business loan or a gambling debt, may also be considered separate property.
Once the court has determined which debts are marital debts, it will then consider how to divide them between the two parties. The court may decide to assign certain debts to one spouse or the other, or it may order both spouses to pay a portion of the debt. The court may also take into account the financial situation of each spouse, including their income and ability to pay the debt, when making its decision.
It is important to note that even if the court assigns a particular debt to one spouse, both parties may still be responsible for paying it. This is because creditors are not bound by the court’s decision and can still pursue either spouse for payment. Therefore, it is important to have a clear understanding of how the debt will be divided and to take steps to protect your credit score during the divorce process.
In addition to working with an attorney, there are several steps you can take to help ensure that your marital debts are divided fairly. First, it is important to gather all relevant financial documents, such as bank statements, credit card bills, and loan documents. This will help you and your attorney get a clear picture of the marital debt and how it was incurred.
Next, you may want to consider negotiating a settlement with your spouse outside of court. This can be a faster and less expensive way to divide debts, and it allows you and your spouse to have more control over the outcome. However, it is important to work with an attorney to ensure that any settlement agreement is fair and legally enforceable.
If you are unable to reach a settlement agreement, the court will make a determination regarding how to divide the marital debt. In making this decision, the court will consider a variety of factors, including the financial needs of each spouse, the earning capacity of each spouse, and the nature and amount of the marital debt.
It is also important to note that New York State is a no-fault divorce state, which means that neither party is required to prove fault in order to obtain a divorce. However, if one spouse has wasted marital assets or incurred debt for non-marital purposes, the court may take this into consideration when dividing the marital assets and liabilities.
As a team, at Michael D. Schmitt, ESQ. we can provide assistance with dividing marital debt in New York Equitable Distribution cases. We will work with you to assess your financial situation and help you understand your rights and obligations under New York’s equitable distribution laws. We will also advocate for your interests, whether that means negotiating with your spouse or representing you in court.
Together, we will identify and value all marital assets and liabilities, including any debts subject to division in the divorce. We will also help you determine which debts are separate property and not subject to division. If you and your spouse are able to negotiate a settlement agreement, we can help you draft and review the agreement to ensure that it is fair and legally enforceable.
If your case goes to court, we can represent you in all court proceedings, including any hearings or trials. We will present evidence and arguments on your behalf and work to ensure that the court’s decision is fair and equitable.
Overall, we understand that dividing marital debt in a divorce can be a complex and emotionally challenging process. We are here to guide you through every step of the way, providing you with the knowledge and support you need to protect your financial interests and move forward with your life.