A couple who has debts to deal with, when plans to get divorced things may not be that easy. There is a certain procedure to be followed for ensuring that neither of the spouses is burdened with the entire set of debt.
In the eyes of Bills
The law says that both the spouses should have an equal access to the economic position of the family. In fact they have an equal right to know the financial data and procure any kind of information related to this.
The court makes it a point to distribute the assets and the debts equally between the two people. However, there could be a difference in the laws from state to state.
This would mean that the decisions from the court can also vary from one state to another.
Various ways of distributing debt
Depending upon the laws prevalent in a state, you may find that the asset and debt is distributed equally amongst the two. You may also learn that more of debt goes to that partner who has been given more of assets.
Some states consider the asset at the time of marriage belonging to both the partners. Some states also consider only that asset which is developed by both the partners after marriage to have an equal right.
If a spouse is not able to clear the debt on his or her own, then the court may direct the other spouse to share the responsibility. This could be irrespective of the fact that the debt was taken by another partner who is not able to clear it.
Approval by the court
After the property of debt is distributed between the
This agreement should reflect that the debt and or property are distributed equally between the two partners.
Process of dividing the debt
- The first thing you need to do is to prepare a list of assets belonging to both of you.
- Followed by this should be a list of assets owned by both of you individually.
- Next would be the evaluation of the assets according to the current market rate.
- Now you have to make an exact calculation of debts you have.
- Never try to exclude any of the assets from the list, because one is exposed to a penalty for hiding any information on this, even if it is unintentionally.
- If there is a debt which is in your name and your ex-spouse has been asked to pay it off, then also you can’t afford to relax. Any delay or non-payment would be intimated to you because it is in your name.
- Court would divide the property on the basis of community property and or equitable distribution basis.
Distributing debt is a task which has to be done judiciously. One must remember to enlist assets in details and also write down the exact amount of debt. Thereafter the distribution process should be done. A spouse with more assets may be given more debts to clear, however rules may vary from state to state and even case to case.