Many people focus on the division of assets when they’re thinking about property division, but that’s not the only thing that has to be split. Divorcing couples also have to handle their marital debts.
There are two primary ways that marital debts can be taken care of. One of these is to pay them off, which may require a liquidation of assets. The other option is to assign each debt to a person to pay.
Why might it be better to pay off debts?
Paying off marital debts is a good idea because creditors don’t have to abide by the terms of the divorce order. This means that if the debts aren’t paid off, the creditors can go after both parties, including putting the late or non-existent payments on their credit history.
When debts have to be assigned to a party as part of the property division process, the assignment has to be equitable. One party can’t be solely responsible for all the debts. In some cases, the debts are divided as a way to balance out the assets so the entire property division order is fair.
If the debts are going to be assigned, it’s critical that you take the time to think about how the payments will interact with your budget. One major change that comes with a divorce is having to count solely on your own income, particularly if your marriage included two incomes.
Working with someone familiar with these divorce-related matters may be beneficial, so you can ensure that you understand the options that are available. It’s typically best to think of things from a logical perspective so you can make decisions in your best interests.