What are the debts that you owe after divorce?
In the US, the divorce rates have increased suddenly and financial problem is considered to be a prime reason behind it. After the recent economic depression, a large number of couples are struggling to come out of debt. These couples file divorce instead of taking help of debt relief company or non profit debt relief agency to pay off the debts. The partners in order to avoid responsibility of paying off debts that he/she has incurred usually tend to file divorce. In this case, a partner denies sharing the responsibility of paying off the debts incurred by the other partner. So the debt stricken partner plans to file divorce in order to divide the debts between them. After the divorce the debts and properties get divided between the separated couple. But what are the debts you owe after your separation?
When we are discussing on divorce and debt then it is found that there are two types of debts like living expenses and community property that the court looks at. Rent, mortgage, groceries and cell phones are included in the living expenses and other types of expenses are incorporated in community property. The debt will be treated as living expenses if the couple owes more than $3,000 on credit card used for the purpose of paying groceries, utilities and cables. It will be considered to be community property debt if you have incurred credit card debt for purchasing gym equipments or new television.
The situation might be complicated if the couple owes both living expense debt as well as community property debt on one credit card. In this case, it might not be possible to divide the debts according to the things that they have bought separately.
Remember that the law varies from state to state so the state where you are residing will determine whether you will owe the debt or not. In states where community property is emphasized then you are liable to share the debts incurred during marriage despite not being responsible for it. If a couple buy equipments worth $30,000 and pay only $10,000 then they will end up owing $20,000 during divorce. In this situation, the debt will be divided between the couple so the separated couple would owe $10,000 each.
Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin considered as community property state.
But in some states the debts are divided after divorce between the couple on the basis of equitable distribution. In this situation, the debts are not divided equally but the judge determines who owes what and divides it accordingly. Therefore, you are not responsible for the debts during divorce that have been incurred by your spouse before the marriage.
Remember that in the community property states the debts are divided equally but in other states the debts are divided on the basis of equitable distribution.
December 15, 2011 10:12 am 
Subscribe