Marital Debt And Divorce: Who Pays?
Marital Debt And Divorce: Who Pays?
It is fairly common for people to have credit card debt or loans to settle in their divorce. The vast majority of my clients blame their spouse for the debt he or she incurred. Most times you will be partially responsible for the debt incurred by your spouse during the marriage, whether you agreed with the purchases or not. New Jersey case law states that fault plays no role in equitable distribution except in cases of extreme levels of criminal or financial fault. Chalmers v. Chalmers, N.J. 186 (1974).
Several years later, another New Jersey court confirmed this ruling by stating that, “we are satisfied that the concept of "equitable distribution" requires that fault be excluded as a consideration. The court then gave two basic reasons for this holding. First, "fault may be merely a manifestation of a sick marriage," and only reflects how a person reacted to a marital problem which may not be of his or her making. Second, the court repeated the partnership or shared enterprise theory that each contributed to the marital estate and we are merely giving to each what really belongs to him or her.
You need to be aware of the debt your spouse is incurring in their own name, or in yours. It is important to understand that the court looks at marriage as a true partnership. Debt incurred by one partner will be shared by the other with a few exceptions.
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