Located and practicing in Martinsburg and throughout Eastern West Virginia
Located and practicing in Martinsburg and throughout Eastern West Virginia

The main challenges associated with dividing debt during divorce

On Behalf of | Jun 3, 2024 | Divorce

A pending divorce often leads to a variety of challenging discussions between spouses. They may have to decide who stays in the home that they purchased together and establish temporary arrangements for child custody. They also have to find realistic solutions for property division matters.

That can be very difficult, especially if the marital estate includes both debts and valuable property. Quite a few debts could technically be part of the marital estate and could influence the overall property division process. There are several challenges that arise when trying to divide debt during a divorce, including the following.

Determining which debts to include in negotiations

Not all debts are typically part of the marital estate. Some debts are the separate property of one spouse or the other. It can be very difficult for spouses to reach an agreement with one another about which debts they have to share responsibility for and which ones should not play a role in the divorce process. Evaluating debts can be one of the more frustrating elements of property division negotiations.

The risk of spousal non-compliance

After people determine what debts they need to divide in their divorces, they then need to reach a realistic solution for dividing those debts. It is common practice for spouses to divide the individual debts between them or to have one spouse take responsibility for quite a bit of the marital debt because of their higher income or retention of more of the marital estate.

Unfortunately, even if there is a family court order instructing one spouse to pay certain debts, there is no guarantee that they follow through on that responsibility. Some people file for bankruptcy after divorce and then leave their spouses on the hook for what they owe. In many scenarios, a cosigner spouse could face collection activity and credit score damage because the other files for bankruptcy or falls behind on payments.

Especially in divorces where emotions become quite intense, people may reach the realization that the best solution involves using marital assets to pay off marital debts so that they aren’t an ongoing concern after the divorce. The extent of the marital estate and the current status of the relationship between the spouses can influence what solutions are best.

Dividing property and debts can be a major challenge during divorce proceedings. Those who familiarize themselves with common issues that arise during divorce can be more proactive about pushing for an appropriate outcome.