Marital debt - it's one of the less-talked-about aspects of property division and divorce, but it often plays a large role in the lives of those it affects. Knowing how to handle your marital debts can help you enter the next stage of your life with less stress and more money in the bank.
To schedule a consultation with one of our attorneys for your marital debt case, contact us online or via phone at (718) 215-0121.
Credit Card Debt in Divorce
If your spouse has debt from a credit card associated with a separate bank account only they have access to, you will most likely not be responsible for it.
However, if you have debt from a joint bank account, you will both be on the hook - regardless of who's name is tied to the account or debt. If at all possible, your objective should be to exit the divorce without sharing any debt with your spouse. This not only helps you get a fresh start, but also ensures you won't be on the hook if your spouse starts failing to pay off jointly shared debts. If you can, work with your spouse to pay off any joint credit card debt you have.
What About Mortgage or Auto Loans?
As we just mentioned, your focus needs to be on eliminating marital debt pre-divorce. You have a few options here:
- Sell the marital house or vehicle in question, eliminating the debt and splitting the profits equitably;
- Buy your spouse out of the asset, effectively paying their debt so you can retain control of the property (or vice versa);
- Have one party refinance the asset without the other, so they become the sole owner of the property.
You don't want to end up in a situation where one spouse misses payments or ends up in collections, because then both parties could have their credit penalized. Sometimes, it's worth sacrificing your ideal outcome if it means eliminating debt.
Am I Responsible for My Spouse's Medical Debt?
In the US, over 79 million people are struggling with medical bills and debt, so it's a common concern in divorces.
Since New York is not a community property state, you will most likely not be held accountable for your spouse's medical debt or bills.
Consider working with an individual such as a Certified Public Accountant (CPA) throughout your divorce. Various financial professionals can help you understand how to effectively eliminate marital while setting yourself up for a prosperous future - it's usually a short-term expense that pays for itself in the long run.
To schedule a consultation with our divorce attorneys for your case, contact us online or via phone at (718) 215-0121.