Most families in the US struggle with some sort of marital debt. Whether it be credit card debt, mortgages, car loans, or even student debt. Outstanding balances are always a source of stress. Not to mention, determining what happens with that debt in the event of a divorce. In South Carolina, family courts usually divide debt between spouses like they divide marital property. But every case is different, as is every outcome…
Marital Debt: Dividing During Divorce
When the family court judge makes the divorce judgement, they will divide all of the couple’s marital property and debt. In this judgement, the court will specify which party is going to pay which bills, and who will receive what property. Generally, courts view any debt acquired during the marriage as both spouses’ debt. This means that the court can divide the debt between you as they see fit. So, if your spouse made poor financial decisions with marital funds, you may receive some of that debt after the divorce. For this reason, it is a good idea to be aware of any debt you or your partner may have before filing for divorce. Additionally, the court does not care whose name the debts are under. Rather, they just care the timeline within which they were acquired.
Are there ever exceptions to this rule?
However, there are exceptions. The court will consider the purpose of the spending when they divide debt. They also consider each spouse’s role in acquiring the debt. For example, if your spouse acquired a lot of debt on a vacation they took with a mistress, you’ll likely not be responsible for that payment. On the other hand, debt in the form of the mortgage for a house the couple lived in together would likely be evenly split between spouses. After filing for divorce from your spouse, it’s important to file an action for Divorce or Separate Support and Maintenance. Once this goes through, marital property and debt stop accumulating.
The division of property and marital debt is an important issue to consider while filing for divorce. After all, if you don’t have children, it will be the one thing holding you two together until dissolved. This is one crucial area where a divorce attorney, as well as a financial advisor, come into play. Your attorney will determine which debts you’re responsible for, and which ones to try and distance yourself from. Then, a financial advisor will be able to help you determine how to tackle those debts in a way that allows your lifestyle to be maintained. You’ll have questions— and that’s normal. The key, is having an informed to party to bring them to.