Am I Responsible for Debts Incurred by my Spouse if the Debt Isn’t in my Name?
Am I Responsible for Debts Incurred By my Spouse if the Debt Isn’t in my Name?
The division of debt is much like dividing any other asset or liability during a divorce. When it comes to debts which were accrued during a marriage, it does not necessarily matter whose name was on the credit card, mortgage, loan, or other cause of marital debt. Whether or not you will be on the hook for debt during your divorce will depend on your circumstances in relation to New Jersey equitable distribution statutes. There are several considerations which can be taken into account to determine if you are responsible for your marital debts.
The divorce debt division attorneys of Jacobs Berger have extensive experience protecting our clients’ financial rights during divorce. We offer dynamic and highly personalized legal solutions for all our Morris County clients and across Northern New Jersey. Our firm views our role in the divorce process as the architects of your new future, and that includes helping to build a solid and secure financial foundation.
Call our office today for a strategic planning session regarding your debt division during divorce or any other divorce matter such as child custody, child support, alimony, division of assets, and much more.
Debt Division Lawyers Define Marital Debt
The equitable distribution of assets and liabilities including debt can be determined based on a number of factors including the length of the marriage, the net worth of each spouse, earning capacity, and much more. However, in order for debt to be considered eligible for equitable distribution, it must first be determined that the debt is “marital property”.
This brings us back to the question: Am I Responsible for Debts Incurred by my Spouse if the Debt Isn’t in my Name? The answer is most likely yes. During a marriage, it is not necessarily relevant whose name appears on a debt just as it is not relevant whose name appears on the deed to your family home.
The key here is when and how the debt was accrued. Debt accrued between the time your marriage became official and either party filed for divorce will likely be considered marital property, and will therefore be the responsibility of both parties. There are exceptions to this as we will discuss in greater detail below.
Divorce and Debt Attorneys: What About Unlawful or Hidden Debts?
Although both spouses are generally liable for debts incurred during a divorce regardless of the name on the bill, there are a handful of situations in which an unknowing spouse could be off the hook for accrued debts. These scenarios may include:
Illegal activities leading to debt. If your spouse committed crimes or otherwise accrued debt through unlawful actions, it is possible that the debt will be considered separately. The crucial element in these scenarios is proving that you had no knowledge and took no part in these illegal actions. An example might be running up debts due to illegal gambling.
Fraudulent financial activities. While genuine fraud is rare in divorce cases, it does crop up on occasion. You may be relieved from responsibilities for debts if your spouse was involved in financial or other forms of fraud during your marriage. Much like with illegal actions, it must be shown that your partner’s fraud was never known to you in order to use it as an excuse from debt liability.
Debt was accrued with the intent of undermining your financials. As unusual as it may sound, spouses going through a divorce may intentionally run up a high debt in order to lower their total net worth. This can be advantageous during the division of assets process. However, a qualified Madison divorce and debt attorney may be able to have these debts removed form consideration as marital property.
Contact our Debt and Divorce Attorneys Today
The debt and divorce attorneys of Jacobs Berger view each divorce and family case as an opportunity to help our clients build a foundation for their family’s future. When it comes to complex financial issues including the division of debt, dividing complex assets, dividing owned businesses, high net-worth divorce and more, our experienced legal team believes in aggressively pursuing financial security while keeping communication open and amicable during divorce proceedings. We have used this unique and effective approach to secure positive outcomes for clients across Morris County towns and all of Northern New Jersey.
If you have questions or concerns about the division of debt in your divorce, please contact us online or through our Morristown offices by calling (973) 447-3943 today for a strategic planning session with one of our qualified and experienced divorce attorneys.