Distribution of Marital Debts in a Divorce

New York City Attorney Skilled in the Equitable Distribution Process

What a couple earns and buys after marrying becomes part of the marital estate. However, they also incur debts together. Marital property and debts are divided if a couple gets divorced. How marital debts are divided is often crucial. If you are getting a divorce in New York, you should consult New York City property division lawyer Ingrid Gherman. She can offer more than three decades of experience in matrimonial law.

The Distribution of Marital Debts

Marital property is divided equitably during a divorce. Assets and property will be divided based on principles of fairness, which means that the split may not be 50/50. This also means that debt acquired during the marriage is subject to division, and this division may not be equal. When the division of debt is done inappropriately, one of the spouses could be left in dire straits.

Marital debts include all of the debts that a couple incurred during a marriage, which are due and owing at the time that an action for divorce is filed in the New York Supreme Court. The debts can include private loans, student loans, personal loans, mortgages, lines of credit, credit card debt, and medical debt. The debt may be for the benefit of one spouse rather than for the family's benefit.

In some cases, a couple in New York City can agree about how to divide assets and debts. However, it is still wise for each spouse to consult an attorney about the division. If a couple cannot agree on how to divide the property and the debts, the court will consider factors such as how long the marriage lasted, each spouse’s income and assets when marrying, whether one spouse needs the marital home, any spousal maintenance award, the liquidity or non-liquidity of the marital property, and the likely financial circumstances of each spouse. Some more complex cases may require considering whether either spouse's contributions give them equitable claims on marital property not in their name, whether marital property includes an interest in a business or professional practice, whether either spouse engaged in wasteful dissipation of marital assets, and whether either spouse encumbered or transferred marital property without fair consideration.

Identifying Separate Debts

The court will look at the nature of a debt, the manner in which the debt was incurred, and the source of repayment to determine whether the court finds a debt to be marital or separate in nature. For example, if a husband buys expensive jewelry and lingerie for a woman with whom he is having an extramarital affair, it would be unfair to saddle the wife with this debt during the divorce. Similarly, purchases in flower shops, vacations, or hotel stays made to conduct the extramarital affair would not be for the benefit of both spouses, and it would be inequitable to saddle the other spouse with such debts.

Credit Card Debts

A common issue in a divorce is credit card debt. The spouses may disagree about whether a debt was incurred for household expenses or was something solely for one spouse. Sometimes credit cards are solely in one spouse's name, and only one spouse makes charges, but if each charge was to pay for marital and work-related expenses, these may be marital debts. If the spouses have differing testimony about what the charges were, the court will make a credibility determination. In New York, any outstanding financial obligations or debts incurred during a marriage that are not solely the responsibility of the spouse who incurred them can be offset against the total marital assets being divided. Accordingly, the court will look at the percentage of credit card debt that is attributable to marital expenses and the percentage that is attributable to individual expenses. The marital debt may be offset against any marital property that is being divided.

Seek Advice From a Knowledgeable Divorce Lawyer in New York City

Your first consultation with Ingrid Gherman will be devoted to the details of your case. It is crucial to bring all of your legal documents to the consultation so that Ms. Gherman can fully investigate the issues in your case and explain the legal paths open to you. Ms. Gherman can help you understand any issues related to the distribution of marital debts. Contact attorney Ingrid Gherman for a consultation at (212) 941-0767 or via our online form.