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.