Much attention is paid to how property is divided in a divorce. Spouses may worry about what will happen to their homes, cars, business, and personal property. However, often equally important is the issue of what happens to debt in a divorce. This is an important issue, as recent reports (https://www.usatoday.com/story/money/personalfinance/2017/11/18/a-foolish-take-heres-how-much-debt-the-average-us-household-owes/107651700/) indicate the average American household debts are as follows:
How this debt is divided will have a huge impact on each of the spouses and their respective financial situations. It is important that both spouses are transparent regarding their debts and are aware of all household debts going into a divorce.
Connecticut law requires that all marital property and debts be equitably divided in a divorce. Equitable division does not mean straight down the middle but instead means division that is fair considering all of the circumstances. For example, if one spouse gets the marital home, the other may get a larger share of other property to make up for it. This is true for debts, as well, and you should have an attorney who knows how to ensure that you receive only an equitable share of the household debt.
Only debts that are considered to be “marital” will be divided and any separate debts will remain the responsibility of the spouse who owns the debt. Generally speaking, marital debts are those that were acquired during the marriage. The debts do not have to be joint accounts to be considered marital debt. For example, if one spouse takes out a credit card or student loan during the marriage in their own name only, it can still be equitably divided since it was acquired during the marriage. There are some exceptions to this general rule, including:
It is important to consider each debt carefully to determine whether it should be considered marital or separate debt.
Often, each debt will be assigned to one spouse and the court should work to divide the debts as equitably as possible. Division of property will also be taken into account – if one spouse gets significant property, they may also be responsible for more debt. This is a complicated matter, however, if debts are not divided in your favor, it can affect your credit and financial situation for years to come.
The Law Offices of Piazza, Simmons & Grant knows how to handle every aspect of a divorce case, including property and debt division. We will protect your rights to a fair distribution to ensure you emerge from your divorce in the best situation possible. If you are facing a divorce or would like to discuss any type of family law matter, please call 203-348-2465 or contact us online to speak with a family law attorney today.