With the exception of those who have a marital agreement with their spouse, there can be a lot of negotiating that occurs as spouses attempt to divide both their property and their debts after they’ve decided to divorce. Unless a divorcing couple agrees about what would be appropriate in terms of asset distribution terms, they may need to go to court, where a Michigan family law judge will apply the state’s equitable distribution law when resolving their fundamental disagreements.
Of course, the standard used to divide property and debt can be somewhat subjective and also confusing for those preparing for divorce. When it comes to dividing debt, what seems fair to one person may seem totally unreasonable to their spouse.
Credit card debt can often lead to disagreements during divorce proceedings, especially when it is quite obvious that one party is responsible for far more of the debt than the other. Can proof that someone was irresponsible with marital credit cards influence how the courts divide those debts?
Honesty and intention both matter when dividing debt
What seems acceptable and even cute when people are in the early stages of a relationship can become major sources of conflict later. Spending habits are a perfect example. In an early relationship, people may not question how much one partner spends on their clothing or personal appearance.
Especially after many years of marriage, one spouse may begin to resent how much the other spends. That spouse may feel like they shouldn’t have to pay for the frivolous spending of their partner. However, provided that supposed to enter the relationship aware of how the other handled money and they were honest with one another about their spending during the marriage, they may have to work out how to divide those credit card debts even though only one spouse did the spending.
If the spending was secretive, if the account was not disclosed or if the balance mostly stems from right before or after the divorce filing, it may be possible for one spouse to claim that those debts represent the dissipation of marital assets. Additionally, credit card debt accrued while conducting an affair may end up excluded from property division in many cases as well.
Regardless of whose name is on the account, most credit card debt is subject to division during the divorce process, even if one spouse has spent far more than the other. Learning more about the Michigan approach to property and debt division can benefit those who are preparing for family court or for a negotiation and/or mediation-based approach to divorce.