What Happens To Marital Debt During Property Division?
As couples enter the divorce process, many times they focus on dividing their marital assets but forget about the marital debt. As you gather your financial information on your investments, bank accounts and real estate, do not leave out the other side of your balance sheet.
Our attorneys at Cross Glazier Reed Burroughs, PC, have decades of combined experience helping clients understand the assets and debts involved in their divorce cases. They know how the courts will view the information and how to advocate for your best interests during the property division phase of your case.
Indiana’s Property And Debt Division Laws
Indiana law has an uncommon approach to property division in that it considers marital property to be all property that either spouse owns at any time during the marriage up until your separation. Even if you brought property into the marriage that is solely in your name, that property will be included for division. The same applies to debt.
As an “equitable division” state, Indiana courts do not necessarily split all assets 50-50 and can divide the property in any way that seems fair and equitable. Keep in mind, however, that there is case law to consider when a deviation from the presumptive 50-50 split is requested. All debts will be considered in the division with an attempt to balance the scales in a fair way, though the court may decide that one party is in a better position to pay off the debt than the other party.
The Role Of A Prenuptial Agreement
If you signed a prenuptial agreement before the marriage or agreed to a postnuptial agreement after your marriage, that document will likely control how to divide property and debt in your divorce. These agreements can save a lot of time and hassle, but they must be properly drafted and signed. Your attorney will review the document and explain how it will apply to your case.
Common Types Of Debt
Certain types of debt are very common for a couple to acquire during the marriage, whereas other forms of debt are more common to bring into the marriage. Common types of debt include:
- Student loan debt – Whether you enter the marriage with this debt, acquire it during the marriage or add to it over time, the court will likely consider whether the family as a whole benefited from that degree and who will be in the best position to keep paying off the loan.
- Mortgage – Many couples own the family home together with a mortgage. Who continues to pay the mortgage will likely depend on whether you decide to sell the house or have one of you keep it.
- Credit card debt – Unless you can show that your spouse purposefully ran up personal debt right before the divorce, most of this type of debt will be attributed to the family as a whole.
The good news is that most couples come to an agreement regarding their divorce settlements, including property division and debt division. Our attorneys will work with the other side to negotiate or mediate a fair settlement that meets your needs and puts you in a strong financial position for the future. Of course, if you cannot agree, our skilled litigation lawyers are always prepared to fight for you in court.
Discuss Your Options With Us
The better informed you are as you start your divorce, the better equipped you will be to make smart decisions for your future. To schedule an appointment with one of our attorneys, contact us online or call our office in Carmel at 317-669-9134 .