Dividing Marital Debt
When a couple is divorcing, it is common for financial discussions to gravitate toward the division of assets, whether that is cash, investments, or property. While assets do need to be distributed, it is essential there is also a plan in place to deal with marital debt. If there is little to no debt, this process can be simple. But if there are large loans in place, there can be disagreements.
If you are going through the divorce process and are carrying credit card debt and student loans, talk to an experienced Bucks County family attorney about how those marital debts can be divided fairly. Debts also include mortgages on primary properties, rental properties and summer homes.
Different Ways to Divide Debt
To divide debt fairly, it is important to determine what is considered equitable for your particular circumstances. In order for debts to be divided equally, it is often best to determine what is fair to both individuals rather than simply splitting the number down the middle. Determining factors can include who has the resources to settle the debts and who benefited from the loan. When it comes to properties, who is going to continue to live in or maintain the property can be part of the discussion.
The following types of loans will be impacted:
- Credit Card Debt
- Loans for Cars, Boats, or Motorhomes
- Medical Debt
- Mortgage Debt
- Student Loans
Strategies for the Best Results
Each type of debt has options for finding an equitable split, a Bucks County family attorney can help you to understand what those options are. For example, in the case of mortgages, the clearest path is to simply sell the properties and split the money. Of course, there are many reasons why people don’t want to take advantage of this option, particularly if one individual wants to keep a home. The house may be important to the individual or seen as a way to provide stability for children.
If a person decides they want to keep the house and buy out their spouse, they can do that as well. When this option is chosen it is important to remember to contact the mortgage company so they can update the loan agreement to show it is the property of one person moving forward. This is important because if the individual who did not get the house wants to qualify for a mortgage later, their name on the house they no longer live in could create problems and more legal confrontations.
The division of marital debt is a key component to securing your financial stability one the divorce agreement is final. Divorce is a time of change and there are many details to review and decide. If you are going through a divorce in Pennsylvania or New Jersey, Kardos, Rickles & Hand can help. Let our lawyers take care of all the technical aspects of your divorce and help you move forward with the rest of your life. Schedule your consultation today, call 215-968-6602.