If you’re getting divorced in Arkansas, you and your spouse must agree on who gets specific marital assets, such as your family home, vehicles, and other property you’ve accumulated in your marriage.
What about Debt in Divorce?
What many couples overlook is that debts also have to be split. Debt division is an especially contentious issue in any divorce, as neither spouse wants to pay more than their fair share. Joint Debts incurred during the marriage can take different forms, including joint credit card debt, student loan debt, auto loan debt, mortgage debt, and personal loans.
What about Debt Incurred by Only My Spouse?
Unfortunately, it may not matter whose name is on a particular debt. This is sometimes true of student loans, which may be in only one spouse’s name but when the loan was made, the personal debts could be viewed as a mutual investment because it could increase the overall family income in the future. So, it wouldn’t be hard to understand why an Arkansas judge would consider the student loan debt to be the responsibility of both spouses and split the payment.
What is Joint Debt and How is it Fair for Both People?
Arkansas is an “equitable distribution state,” which commonly means that the divorce courts will seek to divide all your marital property (and possibly debt) in a fair (and equitable) way to both you and your former spouse.
As we all know, however, “fairness” does not always mean a 50/50 split. This would be true when there is a significant disparity in your and your spouses’ income. The divorce judge could rule that a fair settlement would require one spouse to get more than the other and that one spouse assumes more debt than the other!
The division of debt (and many other issues) may get overly complicated during divorce, and each situation is unique. You may consider the division of debt fair, but your spouse or the family court judge may feel differently.
While your marital debt could be split evenly, a judge will usually consider factors such as your income versus your spouse’s income, who has custody of the children, and much more to be determine how to “equitably” split your marital debt.
Does Their Student Loan Debt Count Against Me?
Deciding who pays student loan debt and other significant distribution areas in your divorce are paramount to your future lifestyle and income. Therefore, the advice and professional guidance of an aggressive and knowledge Arkansas divorce lawyer are of the utmost importance during divorce proceedings.
How Do I Avoid Debt Surprises?
One of the most common mistakes you may make is being in the dark about your finances before and during your divorce. One spouse often handles all of the financial matters and decisions in the household.
So, you may often not have accurate information about your and your spouse’s income, assets, and debts.
This always gives your ex-spouse an unfair advantage over you when it comes time to settle the financial issues and decide who pays what in your divorce.
Even if you suspect your spouse may be planning a divorce, ensure you have all the information on your financial picture. Copy all important financial documents such as account bank statements, credit card bills, savings, brokerage accounts, etc.
What you don’t know will hurt you! Your spouse may liquidate (or transfer to cash) assets or retitle marital assets without you knowing and without your consent.
An experienced divorce attorney will know the best way to negotiate splitting debt and attempt to find an amicable solution in a divorce settlement agreement.
