One of the most common concerns our Morris County divorce clients have, and rightly so, is how their credit card debts will be handled during the division of assetsprocess.
And while marital debt is divided equitably during divorce just like any other complex financial asset such as a home, privately-owned business, commercial property, retirement fund, investment portfolios, etc, most divorce attorneys will recommend that you and your spouse pay off as much of your marital debt as for a very specific reason, that of credit card companies not being bound by court orders and divorce settlement agreements.
However, before you and your spouse can pay off your marital debts, you will first need to determine which debts do, in fact, belong to the marriage, and which are individually owned.
Marital Debt During Divorce, Chatham Division of Asset Attorneys
Unfortunately, deciding which debts are individually owned and which belong to the marriage as a whole is not as simple as looking at the name of the credit card used to incur the debt. Many times, one person may incur a debt on their own credit card in order to purchase something for the marriage. This can commonly be things like:
- cleaning and other household maintenance supplies
- items for children
- any other expense which contributed to the marriage as a whole
So before you and your spouse can decide what to do with your marital debt as part of your divorce settlement agreement, it is important that you work with an experienced Chatham division of asset attorney in order to accurately determine exactly which debts are owned individually, and which belong to the marriage.
Credit Card Debt and Divorce Settlement Agreements in Morris County and NJ
As previously mentioned, many couples choose to pay off their marital debts using other marital assets at the time of divorce, rather than dividing those marital debts between the parties to be paid off at a later time. This is primarily due to the fact that credit card companies are not bound by court orders (such as a divorce’s division of asset agreement), meaning as long as the debt was originally incurred in the name of both parties, the credit card company is free to pursue either party for repayment of those debts regardless of how that debt was divided in a division of asset agreement.
This can lead to situations where your spouse, for example, agrees to assume responsibility for some marital debt in exchange for another marital asset of similar value. After your divorce however, your now former spouse does not pay this debt as per the terms of your agreement, and now the credit card company comes to you seeking repayment for a debt which you have “already paid for” (remember, you gave up some marital asset in exchange for your spouse assuming this debt). Such a situation can leave you either repaying a debt which you never expected to have, or facing the threat of extremely high interest rates and potentially a severely damaged credit score.
For this reason, most divorce attorneys will recommend that you and your spouse pay off all marital debts before finalizing your divorce, rather than dividing your marital debts between the parties and paying them back at a later time.
Contact Our Morristown Divorce and Debt Division Attorneys Today
At Laufer, Dalena, Cadicina, Jensen & Bradley, our attorneys have extensive experience helping clients to successfully and fairly divide all manner of complex financial assets during divorce in towns across New Jersey and Morris County, including Chester, Chatham, Mendham, Harding, Morris Plains, Denville, Dover, and Morristown.
Having already handled many high-net worth divorces and divorces involving complex financial elements such as privately-owned and family-owned businesses, investment portfolios, retirement accounts, and real-estate properties, our firm is ideally suited to helping you discuss and resolve any unique needs or concerns you may have regarding your marriage’s various debts, and how they can affect your final divorce settlement agreements.
To speak with our legal team today in a free and confidential consultation regarding your divorce, your division of asset agreement, or any other divorce or family law matter, please contact us online, or through our Morristown, NJ office at our office.