A lot of the focus during the property division process is on how to split marital assets. This is important. After all, how you divide the marital estate can have significant ramifications for your financial wellbeing for a long time to come.
However, you can’t overlook the importance of debt division during your divorce. It’s an important consideration. In fact, a recent study found that 54% of Americans believe that having a spouse who is in debt is a major contributing factor to marriage dissolution. Many of these individuals see excessive debt as burdensome to their mental health, which can lead to other problems. That’s why it’s imperative that you deal with debt in your divorce in a way that ensures fairness and your post-divorce financial and mental health.
Do you know how to address debt division in your divorce?
In Michigan, the court is most likely to divide marital debt in accordance with equitable distribution principles. This means that a court may considered each spouse’s ability to pay the debt, why the debt was incurred, and whether it’s most appropriate for the debt to follow the asset that is being divided.
But be sure to consider whether certain debts are individually held, too. Separate debt is debt that was incurred prior to the marriage. That may sound simple enough, but the issue can be clouded when marital assets are used to pay off part of an individual debt. Here, there may be a request for reimbursement.
Are you ready to position yourself for post-divorce financial success?
Mishandled property and debt division can leave you in a precarious financial position post-divorce. You don’t want that, which is why the onus is on you to build a strong legal strategy going into divorce negotiations and litigation. We know that can be stressful, which is why law firms like ours stand ready to help you competently navigate the process in a way that keeps your future in the forefront.