We’re all familiar with the storybook ending: meet the partner of your dreams, marry, and live happily ever after. For some, it indeed unfolds this way, but for many, this dream is abruptly interrupted. Today, countless marriages conclude in divorce, bringing emotional wounds and additional challenges. Among them is the financial turmoil frequently ignited by relationship strife. But what happens in the event of a divorce? How can you divide assets or address marital debt? During marriage, couples often accrue varied loans, some individually, others jointly. It might seem overwhelming to determine what financial burdens you’re responsible for.
Embarking on divorce proceedings necessitates an understanding that legislation varies across states, and everyone’s situation is distinct. Hence, it’s worth seeking advice from a seasoned divorce attorney prior to setting the legal wheels in motion, so you can make well-informed choices concerning your situation.
Community Property States
Nine states – Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin – apply community property rules. In these states, any assets or debts held before marriage or acquired via inheritances or gifts stay with the individual. Conversely, assets or debts accumulated during marriage are deemed community property, regardless of the contributor or whose name is on the title. Both spouses equally own and are liable for them. Yet, mingling marital and non-marital funds could push them into the community property category. Hence, legal counsel should assist in differentiating between separate and marital property.
Common Law States
My colleague at Konicek Law informs that all other states follow common law rules. They evaluate the assets of both spouses, whether earned or inherited, and distribute them based on equity and fairness. The court reviews elements such as the financial condition of each spouse, duration of the marriage, and the fairness in the distribution. There are no predetermined rules defining allocations.
Separate Property: This category entails anything you possessed before marriage, gifts and inheritances directed to one spouse pre or during marriage, and what you earned post-separation. While this property is solely yours, in common law states, your spouse can assert a claim over it during divorce proceedings.
Marital Property: It generally refers to earnings and properties acquired with those earnings during marriage. Debts too come under marital property and are split during divorce. For example, if a house purchased post-marriage is under your joint names, both parties bear the mortgage responsibility.
Even if there was a mutual agreement about bill payments, the mortgage lender still holds you accountable if your name is on the title. A divorce agreement doesn’t bind the lender. It would be wise to consult your lawyer about enforceable property divisions and loan refinancing with sanctions against non-compliant individuals.
Note that marital property definitions may vary across states. It gets more complicated when marital and separate properties are blended or when jointly obtained properties involve both marital and separate funds. A divorce lawyer can guide you through your liabilities and potential actions.
In Summary
Divorce invariably invokes its share of difficulties, regardless of how hospitable or hostile the proceedings. The disintegration of marriage is stressful, frequently accompanied by emotional, mental, and financial hurdles. If divorce has left you in a financial rut, seeking a fresh start might be your best move. After your lawyer has helped you navigate the intricacies of the divorce, consider partnering with a reputable debt relief company to regain your financial footing. The quicker you eliminate debt, the sooner you can recapture control over your life and work towards a more secure monetary future.
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