Making the decision to end a marriage is often challenging and not without extensive consideration. After all, marriage is a legal union, meaning it can be a tiring process to endure. However, the dissolution of marriage is something that half of all married couples will experience, so ensuring you know how to properly navigate the process is crucial. One of the most pressing questions surrounds understanding how dividing debt is decided. Luckily, divorce attorneys in Nassau County can help you get answers and ensure you are not responsible for an unfair amount of marital debt.
What Does Equitable Distribution Mean in New York?
When you file for divorce, one of the most contentious aspects of this process for many couples is the division of joint assets. It’s important to understand that only marital assets will be divided when you and your spouse divorce. However, you’ll also find that your marital debts will be divided.
While you may assume that the distribution of assets and liabilities between a couple will always be 50/50, this is not the case. Many states, including New York, adhere to an equitable distribution method when dividing marital property among a couple. This means that the courts will divide debts fairly, not evenly. As such, the courts will examine a number of factors, including each spouse’s contributions, both economic and non-economic, to the marriage to determine the fairest method of dividing assets.
As such, you may find that the court will divide your property in a manner that does not reflect an equal split, such as a 60/40 or 70/30 split.
What Counts as Marital Debt?
It’s important to understand that, under DLR § 236, only property that is considered marital property will be subject to division during a divorce in Nassau County and throughout New York. This includes marital debts. Generally, marital property is anything obtained after the marriage or that is comingled with other marital assets.
This differs from separate property, which is generally owned by one spouse prior to the marriage and kept separate to remain their sole property. In some instances, assets or liabilities incurred during the marriage may be considered separate property based on the unique circumstances of the acquisition.
Common Marital Debts
- Credit card balances used for household expenses
- Joint auto loans
- Home equity loans
- Medical bills that accumulate during the marriage
- Personal loans are used for the benefit of the household
- Mortgages on a marital home
Common Separate Debts
- Student loans
- Debts from an affair
- Loans taken out before the marriage
- Debts in the name of one spouse taken out for non-marital purposes
- Debts from gambling or reckless spending
What Factors Will New York Consider When Dividing Debts?
Before debt is divided among the parties, the Nassau County courts will need to consider a few factors. This helps ensure the split between spouses is equal and fair. The court will consider the following factors when dividing debt:
- The age and health of each party
- The length of the marriage
- The income of both parties
- Contributions made by one party as the primary earner
- Which spouse benefited most from the debt
- The standard of living established during the marriage
- The economic circumstances of each spouse following the divorce
- Prenuptial or postnuptial agreements
- Tax consequences of property division
- Contributions to the other spouse’s career or education
- Property bought into the marriage
However, there are some types of debt that are considered individual. This includes student loans, gambling debt, debt owed before the marriage, and any debt incurred by one spouse spending money on an extramarital affair.
How Do Courts Decide Who Pays Which Debt?
When dividing debts, the court may also assign specific debts to one party. Generally, the court will consider:
- Who benefited the most from the debt
- Who has the ability to repay
- Whether or not payment would result in financial hardship
- Whether one spouse misused marital funds
- If the debt supported the household or only one spouse
What Happens if My Spouse Refuses to Pay Their Share?
If your spouse is not cooperating with their debt payment, you may feel it is unfair to pay their share. However, if they do not keep up on payments on joint accounts, like credit cards, you can be impacted by the late or missed payment, even if you are not responsible for paying off that debt. This is because contracts signed with lenders are separate from your divorce decree. As such, a creditor can target both you and your spouse when a joint debt is missed.
Luckily, you can request enforcement from the state, as this helps protect your credit score in the event your spouse is not keeping up with their required payments. This can result in wage garnishment in order to satisfy debt obligations or even being held in contempt of court.
Contact an Experienced Nassau County Property Division Attorney Today
When going through a divorce on Long Island, you don’t have to endure the process alone. Hiring a seasoned attorney with Barrows Levy PLLC can help ensure you are not inundated with an unfair amount of debt. Our team will examine the unique circumstances of your case to help you fight for the best possible outcome for your situation. Contact us for a free consultation today.
