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The Other Side of Asset Division – Splitting the Debt in Divorce


In any divorce action, you and your spouse have a variety of issues to negotiate and settle. One of these is the distribution of property and assets. Although divorcing spouses give a lot of attention and consideration to what parts of the marital estate they wish to keep, they often do not give as much thought to what will happen to any marital debt.

Splitting assets and debts incorrectly can leave one spouse saddled with an unfair amount of debt and in serious financial trouble.

Just like property division, division of debt requires careful guidance. No matter the length of your marriage, it is perfectly normal to accrue some amount of debt – whether from advanced educational degrees, real estate, or credit cards. If you are in the midst of a divorce, or planning on one in the near future, paying attention to the amount of your marital debt is critical. NerdWallet reports the average American household has $137,879 worth of debt – this is debt that absolutely must be accounted for in a divorce.

So what does this mean for you, during a divorce proceeding? Often, things become contentious when sorting out which assets and which debts belong to which spouse. Here in New York, marital debt is split much the same as marital assets, which is through equitable distribution. This means it is done in a manner considered fair and equitable, but not necessarily 50/50. The court takes various factors into consideration before making a decision.

Marital debt versus separate debt

Before dividing debts, they must be classified as either marital or separate debts. Marital debt is any financial obligation acquired during the course of the marriage regardless of who incurred the debt. On the other hand, separate debt is any debt acquired either before the marriage or after the date of commencement of a divorce action. Separate debt is the responsibility of the spouse who incurred it.

Your attorney can work with you to classify your debts into marital and separate, determining who incurred the debt, when it was incurred, and how the money was used. These types of debts can include:

  • Business loans
  • Car loans
  • Credit card debt
  • Home loans and mortgages
  • Medical expenses
  • Personal loans
  • Student loans

Do note that spouses can avoid having the court decide these issues by instead collaborating towards a mutually agreeable debt-sharing agreement.

At Berkman Bottger Newman & Schein, LLP, our boutique Manhattan divorce attorneys provide knowledgeable guidance regarding property and asset division. We work with only your financial best interests in mind and are ready to consult with you today. We represent clients in New York City, Westchester, and Hackensack, New Jersey. Schedule your consultation today by calling (212) 466-6015 or reaching out to us through our contact form.