A divorce is a complicated process – from dividing assets such as bank, investment, and retirement accounts to the determination of who will retain the marital residence. A way to make it less complicated and less stressful is to be knowledgeable of the topics that will need covered and resolved during the divorce in addition to leaning on an experienced divorce attorney. One of the topics to be prepared to cover is debt. It may not be the first item that comes to mind, but if not considered thoroughly, it can have a financial burden on one or both of the parties involved in the divorce.
There are many considerations when it comes to debt during a divorce. What if one spouse is hiding credit card debt from the other spouse or one spouse is under the assumption that the other spouse’s student loan is not their responsibility? It can be a game changer for anyone’s divorce. Because of the significance that debt can have on someone’s financial situation, it is important to understand and take control of debt before a divorce occurs. If you are going through a divorce, or about to go through a divorce, below is some information to keep in mind regarding debt:
Avoid Accruing Debt Before Divorce
A divorce can be expensive and can include expert fees, court costs, and legal bills, as well as expenses to establish a new living space if moving out of the marital residence – in addition to other expenses. If approaching a divorce, plan ahead by saving money and avoiding increasing debt.
Know the Amount of Debt
If a spouse does not handle the household finances, they will need to learn about this topic before diving into the financial matters involved with a divorce. This includes knowing what debt they and/or their spouse has so they can be prepared to work through who will be responsible to resolve it after the divorce is final, as well as how the payment of the debt during the divorce process is handled. Additionally, if a spouse finds out prior to divorce that they have debt that they were not aware of, they can obtain more information about such debt and can work to resolve it prior to entering a divorce, as appropriate.
Understand Credit Card Debt
Regardless of whether the debt was incurred on a credit card account titled in only one spouse’s name, if the debt was incurred during the marriage, it is marital debt and part of the marital estate. The court can require one party to be responsible for all or part of the credit card debt regardless of whose name is on the account. However, it is important to note that the credit card company can pursue both spouses for the debt to be resolved if it is a joint account and the balance is not appropriately handled. The parties can work together to have account balances paid off and accounts closed to end the possibility of further problems relating to the debt.
RELATED: Here are some tips to keep in mind when planning a divorce.
Learn How Student Loan Debt is Handled
If a student loan was taken out before a marriage, it is usually the responsibility of the person who took the loan out; however, if a student loan is taken out during a marriage, the loan would be marital debt and have to be dealt with as part of a divorce. This could be the spouse receiving the loan and benefit therefrom being responsible for the entirety of the loan or both spouses sharing some responsibility for the loan. Spouses may attempt to amicably resolve how such student loans may be handled.
There are many ways that debt can play a part in a divorce. While it may seem overwhelming, do not forget that there are experts available to help you along the way. For information about what our experienced attorneys at Wilder Mahood McKinley & Oglesby can do to help you in your divorce, contact us online or call our office in Pittsburgh, Pennsylvania, at 412-261-4040.
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