When people think of the word “division” in a Florida divorce, they might automatically be referring to property and who will get what as part of the divorce. The court will use equitable distribution to come to what it believes is a fair outcome with dividing property. That is also true for dividing debt . The two often go hand in hand and it is imperative for those who are getting divorced to be fully aware of how debt—referred to in the law as liabilities—is handled.
Equitable distribution applies to both property and debt
As the court weighs the facts of the case, the fundamental objective is to achieve fairness. It could decide that there will be an unequal distribution based on the following factors: it will consider how much each side contributed to its acquisition; the family’s economic situation; how long the couple was married; if there was an interruption in gaining education or seeking career advancement to care for children, help the other party or be a homemaker; how desirable the assets are; if one side wants to keep the marital home to raise children there; if assets were intentionally depleted within two years of the divorce filing; and other factors the court deems relevant.
Differentiating between marital debt and nonmarital debt
The court will stick to the facts of the case when deciding on how to divide debt just as it would property. It will inventory, identify and value all of the assets while looking at how much is owed. During the marriage, if items were acquired, they will generally be marital assets and marital debt. This is true if it was purchased or acquired individually or by both. If property increased or decreased in value during the marriage, this too is marital property and debt.
Nonmarital debts were incurred before the marriage. If there is debt from marital assets and liabilities as part of a written agreement, the parties came to, it is separate. In some instances, people have incurred debt by forging the other person’s signature. This will not be marital property or debt. It is essential to provide accurate records and show evidence regarding debt to make sure it is divided fairly.
People must be cognizant of how debt is divided as part of a divorce
Debt is worrisome for everyone, but in marriages where there might be substantial outstanding debt for items that were purchased with the expectation that they would be used by both spouses in a family unit, it is not only troubling, but complicated.
If a couple invested in a marital home and has a mortgage, it must be scrutinized to analyze the debt and try to come to a reasonable resolution like one person buying the other out or the property being sold to pay back what is owed to the lender. Some own more than one home, have a boat, automobiles and collectibles. This too may have debt attached that needs to be addressed.
It is natural for people to want to retain as much property as possible from the marriage and limit the amount of debt they will be responsible for. It is up to the court to assess the facts of the case and determine how debt will be split. As these issues can be contentious, it is vital for people to have family law assistance to try and reach a fair conclusion.