This bullet-point series bring together some handy insights on divorce litigation that I have written about over the years, and the concerns that might arise during a case. In this particular bullet point list, we’ll be looking at the concept of marital debt, and how it could be divided in a divorce – just like marital assets.
We’ll also look at the family home, and how the courts approach splitting the value of the home between partners.
Dividing Debts in Divorce Litigation
In a divorce case within New York, the courts use the concept of equitable distribution to split assets between a couple. This means that the assets divided between you and your spouse might not be shared “50/50”, but they are distributed in a way that the courts deem fair (if the parties and their divorce lawyers are not able to work out what is fair by agreement), based on the circumstances in play. During equitable distribution, it isn’t just assets that need to be considered, but debts too.
- Marital assets and marital debts must both be divided in a divorce in a way that the court considers to be fair, based on the equitable distribution. This means assessing both the value of the shared assets between the spouses, and the value of the debts that are marital in nature.
- Marital debts are those defined by the courts to be shared between the two spouses. Debt acquired during the course of a marriage is generally regarded as marital debt, provided it is used for marital purposes, and therefore can be shared between the parties involved. The couples in a divorce can choose to settle the debt before a trial, if not then the court will decide what to do for them.
- The law for New York indicates that financial obligations that occur during a marriage which cannot be identified as belonging to one spouse (separate debt) in addition to the assets that are set to be divided. However, proof is necessary to demonstrate that the debts were created for a marital purpose.
- The person claiming the marital debt must prove that the debt they’re referencing came from marital purposes, such as paying household bills, for instance. When the courts are considering how to divide both debts and assets, they will look at the documents provided, as well as testimony, to determine whether there is a link between the debt and the marriage itself.
Dividing a Family Home in Divorce Litigation
Sometimes, dividing debts and assets in a divorce is simple. When it’s clear that a debt belongs to both of the parties in a marriage – such as the debt for the marital residence that belong to both parties – then it can be divided between both spouses. However, not all assets in a divorce are so easy to divide. One of the most complicated decisions to make during a divorce, is what to do with the family home.
- I often find that if both parties in a divorce have some remnants of a harmonious connection, they can often come to terms on what is going to happen with a family home. To create a quick break, some couples choose to sell the property. However, this means that the couple will need to determine how the proceeds of the home will be divided between them.
- If an attempt to find a way to divide the family home outside of the courtroom fails, the courts will need to make a decision based on the information available to them. These are the factors that judges should be considering for equitable distribution of any marital property. The court will look at a wide range of factors to determine what should happen to a home, including the financial circumstances of each spouse, and the contributions made by each spouse to the marital home.
- Various considerations can come into play when deciding how to split a family house between two spouses. Courts will look at the age and physical or mental health of the individuals, as well as which of the spouses has custody over the children. There will also be some consideration of the source of the funds used to pay for the home.
- In some cases, the court will rule for the house to be sold after the children in a case have left school. This could be the case where the finances are there to wait for distribution of the marital home. This means that the proceeds will need to be divided between the spouses at another time. However, more commonly, courts simply order an immediate sale.
- Couples that attempt to keep the family home through an agreement will also need to consider the mortgage, and remaining debts that may need to be paid. Debts may also need to be refinanced in the name of the spouse keeping the home, and that spouse may agree to buy the other out in accordance with the equity in the home.
Dividing Assets and Debts in Divorce Litigation
Dividing debts and assets in divorce litigation isn’t always as simple as it seems. There’s often more to the process than simply splitting the belongings that both parties have on a 50/50 basis. The courts need to consider what’s fair by looking at the situation in question, which means that every case is different, and has its own nuances to be aware of.
When a couple gets married, they don’t just sign a piece of paper, they entwine their lives together, which also means combining debts, assets, and homes. Marriage is viewed as a financial partnership. This can lead to a very difficult situation to unravel during divorce. However, having the right support on hand from a divorce and family lawyer can make things a little easier. To discuss any of the issues addressed above, or talk about your potential divorce case, please contact me, Mr. Darren Shapiro. You can get in touch for an initial thirty-minute consultation (up to the first half hour is free) via phone, Zoom, or in person using our online form or contact us at (516) 333-6555.