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How family law can affect debt

As many New Jersey residents may already know, making the decision to end a marriage can be very difficult. Family law can be a great source of stress, and it can also be emotionally draining for all of the people involved. Even though separating couples may have a general idea of how the divorce is supposed to proceed, some of them are still taken by surprise when they begin dividing the debts as well as the assets. 

Some may believe that all debt is divided between the divorcing spouses regardless of whose name the debt is under. However, in New Jersey, as well as most other states, that is not the case. Typically, debt is only divided if the account in question is a joint account under both spouses' names. For example, many credit companies will allow the spouses to divide the balance of a joint credit card into two separate accounts assuming that both have good credit individually.

However, larger loans, like home loans, auto loans or student loans, can sometimes be more difficult to divide. Some divorcing spouses choose to sell the home and divide the assets. Another potential solution is that one ex-spouse "buys out" the other, or one ex-spouse, if they are financially able, may choose to refinance the home under a single name. Since spouses often have their own vehicles, each former spouse will usually take on the full responsibility of his or her own vehicle. Student loans, also, normally remain the responsibility of the borrower. 

The process of going through a divorce can cause not only stress but also confusion for the people involved. Many New Jersey residents could benefit from seeking the advice of a family law attorney in their area. An attorney may be able to help his or her client to fully understand the process and how the client's life may be affected after the divorce is finalized.

Source: wisebread.com, "What Happens to Debt After Divorce?", Holly Johnson, March 30, 2018

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