Filing for a divorce triggers a need to manage a variety of tasks that must be completed before one’s marriage can be legally ended. One primary concern of nearly every divorcing couple is the property division process, which involves dividing one’s marital estate. Many people think about assets when they hear about property division; however, it’s also necessary to divide marital debt.
Before you embark on the property division process, you should understand how debts are handled during this timeframe. You and your ex will have to determine what method of addressing debts is suitable for your unique needs and priorities accordingly.
What are the options for marital debts?
One option is to use marital assets to pay off debt. This gives both parties a fresh financial start post-divorce, but some people may not want to deal with having to liquidate assets.
Another option is divide the debts between both parties. It’s important to understand that if you don’t formally transfer each debt to one person’s name only, creditors can hold you and your ex equally accountable if a particular debt isn’t paid.
If debts need to be divided, it might be possible to have each debt transferred to individual accounts. This may be difficult to make this happen because creditors don’t have to approve transferring a debt to only one party, but it is often an option that is worth a try.
Each decision you make during the property division process can significantly affect your future. Working with a legal professional who can help you determine how each option will impact you may be beneficial given all that is at stake.