Debt in divorce

On Behalf of | Oct 18, 2021 | Family Law |

Married couples typically accumulate quite a few marital assets over the years. While most people know that those assets have to be divided up during a divorce, they often overlook jointly owned debt. Debt is often considered marital even when it is only in one person’s name, so it is important to keep a careful eye out and make sure all debts are included in property division.

Looking for debt

A good place to start is with reviewing one’s credit report, which should show most, and perhaps all  associated debts. It may also be wise to cancel any credit cards or other lines of credit where possible to avoid incurring any extra debt during the divorce process. North Carolina couples generally have significant control over how they choose to divide debt, and some spouses even negotiate for certain assets by offering to pay off more of the debt.

Remember financial assets

Much like debt, financial assets are overlooked during property division. This is perhaps because property division tends to be associated with physical assets, such as the family home or vehicles. Forgetting about financial assets can negatively impact the outcome of a divorce though, and may leave one spouse with much less than the other. Financial assets to keep in mind when going through a divorce include:

  • Checking accounts
  • Savings accounts
  • Retirement savings
  • Cash
  • Investments

While divorce is certainly an emotional process, it is important to remember that it is also a legal process. The outcome of a divorce settlement can have long reaching implications on a person’s financial security. Paying careful attention to any joint debts and financial assets is a small step one can take toward ensuring an outcome that is as equitable as possible. Other steps one might consider include learning more about North Carolina family law and seeking the guidance of a knowledgeable attorney.