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Just like assets, debt is subject to equitable distribution. That means it gets shared, often equally, between the parties. The court will look at the nature of the debt and determine how to share it. For example, debt that was accumulated to buy the marital home is something where each party will share in the liability. With credit card debt, you have to look at where and how that debt was accumulated. Did you secure the credit card debt because you went on a trip with your new boyfriend or girlfriend or to buy back to school clothes?
Another large problem we have with debt is the “mystery loan”. It often comes from one person’s parents, who lent the parties money to buy a house or pay off another debt. The court will look carefully at these “loans” and see what was done. If a party wants to protect themselves under those circumstances, they must take whatever steps are necessary to prepare a note, secure the debt, and have some form of payment schedule that is adhered to. A gift does not become a loan just because the couple is getting divorced.
If a party has a retirement account, an annuity, or a pension, the money saved during the marriage is marital money and is subject to an equal division. Marriage is usually defined as the date of marriage through the date the complaint for divorce is filed.
Credit card debt is one of those things that generates a tremendous amount of litigation. Debt incurred for marital expenses, despite who charged it, is subject to distribution. Debt for extra marital items may be allocated exclusively to the party who incurred it.
Exchanging financial information is the part of the divorce process that we call discovery. After you file your complaint for divorce, we send a series of questions called interrogatories and demands to produce financial records. We want to see bank statements, going back three to five years. We want to see credit card statements from up to five years back. We want to see whatever property is owned. If you own a business, we want to see everything that deals with it. Once we have all of the financial information, we have it organized, processed, and analyzed.
The biggest problem with divorce is parties often act out of emotion. They’re not thinking clearly. They’re also thinking short term. A lawyer has to be there to reign the client back in. It’s very simple. Your marriage was a partnership, just like a business partnership. We take a business approach to what we have to do as we are breaking up your partnership. As your attorney, it’s our job to maximize your value from that partnership.
For more information on Division Of Debt In A New Jersey Divorce, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (855) 208-3650 today.