Approximately 40-50% of marriages in the United States end in divorce. The average American carries a personal debt of $90,460. Therefore, divorce debt can result in devastating consequences for one or both partners.
Likewise, the distribution of assets and debts isn’t always straightforward. Divorce can be emotionally exhaustive, and it’s imperative to protect yourself from further financial issues. Below is more information about the nuances of divorce and debt and splitting debt in divorce in New Jersey.
How Is Debt Divided in Divorce in New Jersey?
Every state has its own divorce laws. In New Jersey, assets acquired during the marriage are divided equitably. The court determines what is equitable and will divide assets and debts fairly between both spouses. However, when it comes to divorce and debt, that doesn’t mean the division is split 50/50.
Divorce debt and the divorce debt split can be confusing. However, there is a clear distinction between marital debt and separate debt. In New Jersey, marital debt is defined as any debt incurred during the marriage. Such debts may include property, bank accounts, businesses, and cash. It may also cover other debts like memberships, season tickets, intellectual property, tax liabilities, and loans made to family and friends. Typically, both spouses hold responsibility for these debts.
Non-marital debt refers to debt incurred outside the marriage. This may include debts like student loans or other debts incurred before the marriage. For example, if one spouse entered the marriage with debt, the other spouse is not responsible for paying it.
How is Credit Card Debt Split in New Jersey?
The average American holds $5,700 in credit card debt. Generally, as long as the credit card spending went towards marital or family expenses, both parties hold responsibility for the credit card debt. This can apply even if only one name is on the account.
In some cases, if the credit card usage solely went towards one person (like a spouse’s sibling), with absolutely no benefit to the other spouse or children, that person will be responsible for the debt. The court will decide how to split the debt after considering how the debt was incurred.
Can You Prepare for Managing Divorce Debt Ahead of Time?
Yes. You’ll want to start by identifying all your marital debt and separate debt. This process can be both lengthy and time-consuming, but it’s critical. You want to incorporate everything into your agreement, as this will mitigate the risk of ongoing issues with your spouse. Additionally, you may not understand all the complicated laws. Working with a dedicated attorney is so important—they can advise you on your best options regarding your divorce and debt.
Final Thoughts on Debt During Divorce in New Jersey
Divorce is life-changing, and the prospects of managing divorce debt can compound the stress. At DeTorres & DeGeorge Family Law, we understand these challenges. We dedicate ourselves to deliver the very best results for our clients. Contact us today to learn more about how we can help you.