Dividing Marital Debt in New Jersey

If you or your spouse has been carrying serious debt, then debt division can have a huge impact on how you move forward with your life after divorce. How do you protect yourself financially from a spouse’s debt? What do you do if you have joint credit card debt but your spouse is the one who did the spending? How do you find ways to work together prior to the divorce to resolve your debt issues so that you do not need to worry about creditors coming after you once you are divorced?

Most people do not realize that if one spouse files for bankruptcy, the other spouse might be in the uncomfortable position of being assigned the debts that the indebted spouse has wiped out or reorganized through bankruptcy.

New Jersey is an equitable property and debt division state. This means that division of your debt and assets acquired during the marriage (with some exceptions) must also be fairly executed, though not necessarily equally.

What Is Marital and Non-Marital Debt?

Debts in a divorce will be either marital or non-marital. However, it is not so easy to make this determination. Questions that attorneys and a judge will take into account include what the purpose of the debt was, who took on the debt and when that happened, whether both spouses agreed to the debt, who benefited from the debt, and who can more effectively pay off the debt after divorce.

How Does Debt Division Apply to Credit Card Debt?

Essentially, any debt incurred from a joint credit card or line of credit means that both you and your spouse are responsible for payment of that debt. However, if your spouse racked up a significant amount of debt that did not contribute to the marriage or the family, then that debt may be divided up disproportionately, with the indebted spouse being assigned more of that particular joint credit card debt.

However, if the indebted spouse files for bankruptcy and the debt is wiped out, creditors may come after you for the remainder of the debt.

Marital debt will generally include:

Joint credit card debt, in which both your names are on the credit card agreement
Mortgage loans
Car loan debt
Debt you owe from a company you both own

Equitable distribution of debt and assets does not mean 50/50. In most cases, the debt will be divided according to each spouse’s ability to pay off the debt, along with a number of other factors.

Contact an Experienced Marital Property Division Lawyer in New Jersey

To discuss your concerns and how to approach division of debt and assets in a divorce in southern New Jersey, talk with an experienced family law attorney at Taylor and Boguski, in Mount Laurel, NJ. Please call 800-404-5299 or 856-234-2233 or contact us online.

Protecting Your Rights in a Divorce Mediation

When you are involved in a marital dissolution in New Jersey, there are a number of different ways your differences can be resolved. You can take your disputes to court, asking a judge and/or jury to make decisions about child custody and visitation, child support, alimony and the division of marital debts and assets. Litigation can be expensive, though, and can be an extremely time-consuming process. You could seek to negotiate solutions to your disagreements, but that can be difficult as well, as you may feel that you have less bargaining power, or can be intimidated by your ex-spouse. An alternative that works for many people in New Jersey is divorce mediation. This blog post helps you identify ways to protect your interests in divorce mediation.

What Is Divorce Mediation?

In New Jersey, divorce mediation is a process whereby a third party, who represents neither spouse, acts as a facilitator, helping the parties identify and implement solutions that work for both of them. The mediator is typically someone with specialized knowledge about family law matters, who can make constructive suggestions to the parties regarding ways to settle their disputes. Parties can voluntarily agree to take their differences to mediation, or mediation can be ordered by the court.

How to Get the Best Results in Mediation

Mediation is designed to be a “win-win” process. It is not set up to determine who is right and who is wrong. Accordingly, going into the process with an open mind and a willingness to consider alternatives will likely enhance the chances that you will find a mutually beneficial solution.

The first thing to understand is that you don’t have to convince the mediator of anything. The mediator does not consider legal arguments, does not take testimony, and does not render any decisions. The person with whom you will have to work, and who you will need to help understand your position, is your ex-spouse. If you go in making demands, but not expressing any willingness to compromise, you will likely have little success.
It is also important to understand that, while a judge may compel you to take your differences to mediation, you are not required to resolve your disputes in mediation. You should never agree to something you don’t want simply because you believe that you have to settle your differences. All offers made in mediation are just that—offers to settle. You can always reject an offer. You can also walk away from mediation if you are feeling browbeaten or intimidated.

You will also have the best chance of resolving your controversies in mediation if you prepare in advance. Make a list of those things you must have, as well as those items that are negotiable. If something is non-negotiable, make certain you understand why.

Finally, remember that mediation about issues such as child custody, visitation and child support all affect your minor children. Be clear that what you are seeking is in their best interests, and always defer to this standard when evaluating offers from your ex-spouse.

Contact the Law Office of Taylor & Boguski

To schedule a free initial consultation with experienced New Jersey family law attorneys, contact Taylor & Boguski by e-mail. To learn more about our practice, visit our practice area overview page.

If you have decided to file for divorce, or are a party to a divorce proceeding, you may want to resolve matters, if at all possible, without the need to go to trial. Divorce litigation can be costly, in terms of time, money and emotions. There are options that will not only minimize stress, anxiety and expense, but will give you greater control over how your differences are resolved. This blog post looks at the ways you can avoid divorce litigation.

The first step to minimizing the risk of divorce litigation is to fully understand the costs of taking matters to trial. If you choose to dispute everything, and require a judge or jury to determine the outcome, you will necessarily go through a lengthy process. Once a divorce complaint has been filed, the court will establish a discovery schedule. This sets forth the amount of time that will be spent gathering all relevant information to determine child custody and visitation, child support, alimony or spousal support, and the division of marital debts and assets. In most instances, there will be requests for production of documents, as well as depositions of parties and other relevant witnesses. Your lawyer will expect to be paid for every task they handle for you. If they draft a request for production of documents, or a response to such a request, you will be billed. When they review all documents, you will be billed. When they appear on your behalf at a deposition, meeting or hearing, you will be billed. And, in addition to the expense, such actions take time.

Once you understand the cost of divorce litigation in terms of time and money, you should take a look at alternative means of dispute resolution, including negotiated settlements, mediation, and the collaborative approach to divorce. In a negotiated settlement, you and your counsel work directly with your ex-spouse and opposing counsel to work out agreements governing custody and support, as well as property matters. In mediation, you work with a neutral third party, who facilitates efforts to find mutually beneficial solutions. In the collaborative law process, you and your ex-spouse agree to try to resolve all matters without the intervention of the court. Your lawyers can also participate in the process.

The common component of successful negotiation efforts, mediation and collaborative law attempts is a willingness to work with your former spouse to find solutions that work for both of you. This means you may have to identify those items that are not negotiable and those about which you can be flexible. In all matters related to your minor children, however, you should always give priority to what is in their best interests.

Contact the Law Office of Taylor & Boguski

To schedule a free initial consultation with experienced New Jersey family law attorneys, contact Taylor & Boguski by e-mail or call 800-404-5299. To learn more about our practice, visit our practice area overview page.

Resolving Your Differences through Alternative Means

If you have come to the conclusion that your marriage cannot be saved, you can seek to settle your disputes in court. However, divorce litigation is typically costly, both financially and emotionally. If you have minor children involved, or if you want or need to maintain a positive relationship with your ex-spouse, you may want to consider other alternatives.

Divorce Mediation

In the mediation process, you work with a third party whose task is to help you find a mutually beneficial solution to all your differences. The mediator is neutral and does not represent either party. The mediator typically does not take testimony from witnesses, although both parties to the divorce have an opportunity to tell their story. The mediator does not make decisions about such issues as custody, visitation, support and property distribution, but helps the parties work together to identify and implement an outcome that is in everyone’s best interests. If you resolve all your differences, the mediator may help you put together an agreement that is enforceable in court.

There are many benefits to divorce mediation. First, because you have to work cooperatively to find solutions, mediation can allow you to maintain a positive relationship moving forward. Because you don’t have to get on the court’s docket, and don’t typically have to engage in discovery (gathering and sharing evidence), the mediation process can be completed much faster than litigation. Unlike litigation or even arbitration, you get to participate fully in the decision-making. You can make suggestions regarding how your differences will be resolved, and can always reject an offer from your ex-spouse. In most instances, the mediation process will be less expensive than other forms of dispute resolution.

The Arbitration Process

Arbitration can look similar to mediation, but has significant differences. In arbitration, you work with a third party, but the third party is typically someone with an extensive understanding of divorce and family law. The arbitrator performs a role similar to that of a judge, considering evidence and making rulings regarding how custody and visitation will work, whether there will be spousal support (and how much will be paid), and how marital debts and assets will be divided.

The arbitration process still offers significant advantages over divorce litigation. In most instances, you will be able to complete the arbitration process far more quickly than you will be able to resolve matters in court. Arbitration can be binding or non-binding. If it is non-binding, you have the right to reject the ruling of the arbitrator, and can still seek to resolve your dispute in court.

Contact Taylor & Boguski

To schedule a free initial consultation, contact Taylor & Boguski by e-mail. To learn more about our practice, visit our practice area overview page.

Divorce and the Division of Marital Debt in New Jersey

Mount Laurel Divorce Attorneys • Division of Marital Debt

Regardless of whether you’re considering divorce or have already been served with divorce papers, how you settle existing marital debt is as important as the division of marital property. Here, it’s important to keep in mind that you’re financially responsible for any loan, credit card, or line of credit your name is on.

This means if you jointly applied for financing on your spouse’s car you’re still responsible for any debt on it even if he or she is the only person that ever drives it. Likewise, your spouse may have a Macy’s, Costco American Express, or Citibank credit card that you never use. Even so, if your name is on the account and he or she defaults on payments, the creditor can still pursue collection actions against you.

The Divorce Agreement and Marital Debt

While it’s always wise to include language in your divorce settlement that indicates who is responsible for what debts, this is not enough to protect you in the event your spouse fails to pay off the debt in question. The terms of your divorce agreement are binding on you and your spouse but have no legal relevance regarding your obligations to creditors.

As such, if your spouse defaults on a credit card he or she agreed to pay off, you can’t protect yourself against collection actions by claiming your divorce settlement specifies that your spouse will pay off its outstanding debt. As far as the credit card company is concerned, your name is on the account so you can be held responsible for it.

Marital Debt – How to Use the Divorce Settlement to Protect Yourself

In order to avoid problems with marital debt after your divorce, it’s best to find ways to settle debts before your divorce agreement is finalized. If you and your spouse are willing to work together, you can agree to allocate certain assets in exchange for paying off various debts. For example, if $10,000 is owed on your spouse’s car loan you co-signed, you can agree to pay off the loan in exchange for a similar value in marital assets – say, CDs, IRAs, or money in a savings account.

If this isn’t possible and you intend on selling your marital home, you can specify in advance that certain money will go to you to reimburse you for the debts you’ve accepted or to pay creditors directly. If your spouse is unwilling to work with you in this regard, specifying in your divorce settlement who is responsible for what debts can provide you with legal leverage to sue your spouse if he or she defaults on debt assigned to them.

Protect Your Financial Future – Contact Taylor & Boguski

There are a number of financial issues to consider in divorce. Understanding steps you can take now to protect yourself will help ensure your financial stability in the future. Here, it’s important to understand how divorce can affect your credit and what you can do to protect your credit score. To learn more about marital debt and divorce, contact Mount Laurel divorce attorneys at Taylor & Boguski, LLC today.