If it appears that you and your spouse are headed for divorce court, it is only natural to want to know more about the divorce process and what to expect at each stage of the process. One issue that must be addressed in every divorce is the division of marital assets and debts. People have a tendency to focus on the division of assets, worrying much more about who will get the house or how the couple’s bank accounts and investments will be divided than about who will pay the marital debts. To help ensure that you are protecting all of your interests in your divorce, a Murfreesboro divorce attorney discusses the division of assets.
Don’t Forget the Debts
If you are heading for divorce, make sure you head into the process with a firm understanding of all the issues that must be resolved in the divorce. If there are minor children, issues relating to custody and parenting time with the children will probably be on the top of your list of divorce issues. Child and spousal support, whether you will be paying or receiving the support, will also undoubtedly be brought up immediately. Deciding who gets what is also something couples typically discuss early on in the divorce process. What many people tend to forget about, however, are the debts of the marriage. Not only is it important to start thinking about the division of debts early on as well, but you should also have at least a basic understanding of how courts handle the division of debt if required to do so. Finally, you need to understand what happens after the marital debts have legally been divided.
Marital vs. Separate Debts
Debts are treated essentially the same way as assets in a divorce. The first step is to classify debts as separate or marital debts. Debts that existed prior to the marriage are the separate debts of the individual who incurred the debt and are not subject to division during the divorce process. Marital debts include those incurred by both spouses and also those incurred by either individual spouse during the course of the marriage. This is often news to people because they fail to realize that they can be held legally responsible for a debt incurred by a spouse during the course of the marriage.
Dividing Marital Debts
Debts of a marriage are not necessarily divided equally in a divorce. Like the division of assets, a court will attempt to allocate debts fairly and will attempt to assign the debt to the party who benefit most from the debt. In Tennessee, a court will consider the following four factors when deciding how to allocate marital debts in a divorce:
- the debt’s purpose;
- which party incurred the debt;
- which party benefitted from incurring the debt; and
- which party is best able to repay the debt
For example, if one party ran up a credit card after the parties separated, the court would likely assign the credit card debt to that party in the divorce.
Beware of Joint Debts in a Divorce
The division of joint debts causes much confusion – and often problems – post-divorce. Although a court can order one party to pay a joint debt, that order does not release the other party from liability for the debt as far as the creditor is concerned. Unfortunately, even if your spouse agrees to pay a joint debt, if he/she doesn’t pay it, the creditor can still come after you for payment. Your only recourse at that point is to return to the court and ask for your ex-spouse to be held in contempt. To ensure that the parties to a divorce understand how joint debts are treated, all divorces must contain a ”Notice on Liability to Creditors” that reads as follows:
Pursuant to Tenn. Code Ann. § 36-4-134, each party acknowledges that he or she has been advised that a divorce decree does not necessarily affect the ability of a creditor to proceed against him or her or his or her property, even though he or she is not responsible under the terms of the decree for an account, any debt associated with an account, or any debt and that it may be in his or her best interest to cancel, close or freeze any jointly held accounts.
Contact a Murfreesboro Divorce Attorney
If you have additional questions or concerns about the division of debts in a divorce in the State of Tennessee, it is in your best interest to consult with an experienced Tennessee divorce attorney as soon as possible. Contact the team at Bennett, Michael & Hornsby today by calling 615-898-1560 to schedule your appointment.