Many people approaching a divorce may not realize the division of debt is an important part of marital property division. They may be focused on specific things they want to keep, possession of the family home, protection of retirement accounts or retaining ownership of a business or professional practice. It is quite natural to focus on the asset side of the marital property issue. However, the divorce and family law attorneys at Dodd & Dodd also pay close attention to the debt side of the equation to protect the goals and interests of our clients.
For example, was a student loan taken out or refinanced after the date of the marriage and before the date of separation? If so, this might appear to be considered to be marital property. However, it is important to trace the source of the debt, when it was incurred and who benefitted from the transaction. In this example of student loan the division of debt portion of the marital property process should include careful documentation of the source of the original debt and if that was a “separate” obligation.
Another common issue in the division of debt are loans taken to start a business. For example, it is quite common for individuals to take loans or advances against a retirement vehicle such as a 401(k) or a second mortgage in order to fund or support a business. They want to keep the business, but don’t seem to think about the source of money which started or supported that business.
The division of debt is an important part of marital property division, especially from the perspective of moving forward. What assets do you wish to keep? Your spouse? What debts may be associated with those assets? Would you trade some portion of your marital property to eliminate a debt in order to reduce your own financial burdens and improve finances after the divorce as you start a new path forward? These are important issues to discuss with your family law attorney at Dodd & Dodd. We invite you to review the strong recommendations of our former clients and contact us or call 502-584-1108 to schedule an appointment with one of our experienced divorce and family law attorneys.
