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How to handle debt during the divorce process

On Behalf of | Jul 20, 2022 | Divorce |

In New Jersey, assets held in a marital estate are divided in an equitable fashion. Generally speaking, the same is true with any joint debt balances that remain when your marriage comes to an end. A judge will likely look at a number of factors such as your income, your spouse’s income and the purpose of a specific debt when making a ruling.

Should you pay off debt before getting divorced?

Making an effort to pay off debt before ending your marriage may be ideal as it may make the divorce process a less contentious one. Furthermore, getting out of debt can improve your credit score and creditworthiness, which might make it easier to get a car, home or credit card of your own.

The divorce decree doesn’t trump your cardholder agreement

It’s important to point out that you are responsible for any debt in your name regardless of what a divorce decree says. For instance, if you and your former spouse share a credit card, the credit card company could come after you if this person fails to make payments in accordance with a judge’s order. Therefore, it may be a good idea to look into refinancing a credit card, mortgage or auto loan so that it is no longer in your name.

Ending your marriage may have a significant impact on your short and long-term financial circumstances. However, you may be entitled to spousal support, child support and other forms of assistance to make the transition to single life an easier one. You may also request that your former spouse pay a majority share of any debts that were accumulated during the marriage. Finally, you may be entitled to a majority share of any assets accumulated during the marriage.

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