Who is Responsible for the Marital Debt In a Long Island Divorce?

by rhornberger | Jan 6, 2015

As a Long Island Divorce Lawyer, I have heard hundreds of scenarios for how a spouse learns their partner wants to end the marriage and get a divorce. Of course, usually it is not a total surprise and both spouses knew the marriage was in trouble, but when it comes right down to it, hearing it in all it’s finality is a blow and starts your mind racing.

Essentially, it boils down to something like you come home from work one day to hear your spouse say the words “I want a divorce.” Naturally, hundreds of thoughts are racing through your mind, what about the kids, the house, and the family pet? Who will the children spend Christmas and Thanksgiving with; can I still take them to my mom’s in Florida? These thoughts are natural and practically immediate upon hearing those words. What is not usually so natural and immediate are the thoughts about what happens to the $27,000 worth of credit card bills your spouse incurred on your joint credit accounts only three weeks earlier.

Am I Responsible for My Spouse’s Debt?

Divorce in Nassau County or Suffolk County on Long Island are covered by the laws of New York State. Divorce laws in New York follow what is called Equitable Distribution. This is a system of property division that calls for the “equitable”, or fair, distribution of marital assets. As previous posts on this site have stated, marital assets are those assets which are obtained during the course of the marriage. What is lesser known however, is that marital debts and liabilities (those debts and liabilities which are incurred during the marriage) are also subject to equitable distribution. That means that the $5,000 shopping spree your spouse went on days before he or she filed for divorce may still be your responsibility. Where is the fairness in that you ask? Technically a marriage is a union, and therefore there is joint responsibility for all the benefits and burdens.

How Do I Avoid Paying Debt That is Solely My Spouse’s?

Naturally, no one wants to pay for the debts of another. Even more so, no one wants to pay for the debts of the person who just told them he or she no longer wants to be married to them. The best solution to this type of situation is to enter into a stipulation, or settlement agreement, which your Long Island divorce attorney will draft for you. Most stipulations have an entire article devoted to marital debts. If you and your spouse have no joint debt, a statement representing that fact will be placed into the agreement. However, if you do have joint debt, your divorce lawyer will help you determine who will pay for what and for which debts you will assume joint responsibility. This should all then be laid out in the agreement, including the creditor, the amount owed, when the payments are to be made, and who will be making those payments.

What if We Simply Cannot Afford to Pay the Marital Debt?

Unfortunately, some couples have incurred such a high amount of marital debt, whether the fault of one or both parties, that they simply cannot afford to pay it off. In instances such as this, the sale of the marital residence, if owned, may be the only solution. Couples who find themselves in this situation may opt to make minimum monthly payments on any outstanding debts until the sale of the marital residence. After the sale and the satisfaction of the mortgage and other necessary expenses, the marital debt can be paid off with what proceeds are left from the sale of your home. If you and your spouse decide this is the best option for you, be sure your divorce attorney puts a clause in any agreement you enter stating that any outstanding marital debts will be satisfied in this manner.

What We Do With Our Joint Credit Cards?

The best option for both you and your spouse is to close all joint credit and/or savings accounts and cancel all joint credit cards. This way going forward, you will both have your own individual bank accounts and credit cards and will not have to worry about your spouse incurring debt under your name. If you decide not to do this, keep in mind that the credit card companies do not care that you and your spouse are going through a divorce. If you have a Visa card under both of your names, you both will be responsible for any expenses charged on that card.

Experienced & Compassionate Long Island Divorce Lawyers Can Help You Divide Your Debt

Dividing up the marital debt can be a tricky and time consuming process. If your divorce is amicable, you both may agree to split the debt evenly, or that you each will pay for what you purchased. Unfortunately, not all divorces go that smoothly. If that is the case it is best to discuss with your divorce attorney how a stipulation of settlement can provide a solution to the problem of marital debt. The compassionate and experienced divorce attorneys at Hornberger Verbitsky, P.C. have years of experience helping couples fairly and appropriately divide up their debt in their stipulation or settlement agreements. If you have questions, give us a call Contact us today at 631-923-1910 to schedule your free, no-obligation consultation with an experienced Long Island divorce attorney.