Addressing Marital Debt Concerns
Are you considering a divorce but worried about how marital debt will be handled? It’s completely understandable, especially if your soon-to-be-ex-spouse has accumulated substantial debts during your marriage. We’re here to provide guidance and assurance regarding how Colorado law treats marital debt during divorce.
What Is Marital Debt?
Before anything else, we must first understand what marital debt is. Marital debt encompasses any debt incurred during the marriage. Examples of marital debt include joint mortgages, credit card debt for furnishing your home, or medical expenses accrued during the marriage.
What Is Non-Marital Debt?
Non-marital debt comprises debts incurred before the marriage, such as student loans or separate property mortgages. It can also include debts accumulated after separation but before the divorce. Courts often don’t classify these as marital debts.
Mixing Debts in Marriage: A Common Occurrence
During a marriage, debts can also commingle. This means that a supposedly non-marital debt can become a marital one. For instance, if one spouse took out a personal loan to assist in refinancing the other’s student loans. In these situations, having a divorce attorney by your side is advisable. They can help ensure you’re not put at a disadvantage.
Fair Debt Sharing in Divorce: Not Always 50/50
When it comes to dividing debt during a divorce, Colorado follows an equitable distribution, which means that joint debts will be divided equitably between the two spouses. This doesn’t necessarily mean an exact 50/50 split. It aims for a fair distribution. For instance, if one spouse incurred debt without the other’s awareness or spent the funds solely for personal reasons, that debt usually stays with them.
It’s important to note that any debt acquired while the divorce is ongoing will also be distributed fairly. So, refrain from impulsive spending choices and avoid assuming that specific new debts won’t affect you.
Court Decisions on Debt Allocation
To accurately categorize debts and issue judgments, the court will seek to establish when and for what purpose the debt was acquired. For instance, if it is determined that debt was incurred selfishly, covertly, or as a result of marital misconduct during the marriage, the court may decree that one party bears sole responsibility for that debt. Moreover, under certain justifiable circumstances, a Colorado judge might opt to assign a greater portion of the debt to a party with the means to manage it.
Typically, determinations regarding debt division are tailored to the specific circumstances of each case, leading to varying outcomes based on individual factors.
Factors that Affect Debt Distribution in a Colorado Divorce
Apart from marital vs. non-marital debt, several other factors are considered when distributing debt. These factors include:
- Economic Circumstances: Evaluating the financial situations of each spouse, including their income, assets, and liabilities.
- Debt Responsibility: Assigning responsibility for specific debts based on various factors, including who incurred the debt and how it was used.
- Dissipation of Marital Assets: Examining if either spouse has recklessly spent marital funds on non-marital expenses, which can impact debt allocation.
- Spending During Separation: Assessing debts incurred after separation but before divorce proceedings, which may or may not be considered joint debt.
- Contributions to the Marriage: Recognizing each spouse’s contributions, both financial and non-financial, during the marriage.
- Duration of the Marriage: Considering the length of the marriage as it relates to debt distribution.
- Marital Assets and Support Payments: Factoring in the amount of marital assets and any child or spousal support payments awarded to either party.
- Legal Documents: Reviewing legal documents such as prenuptial and postnuptial agreements that stipulate certain liabilities and obligations.
These factors are taken into account to make informed decisions about how marital debt should be allocated during the divorce process.
Get Sound Legal Advice Regarding Your Divorce Debt Distribution
Do you find yourself grappling with questions about how debt is distributed in your Colorado divorce? If so, don’t let uncertainty add to the stress of this situation. Reach out to us at The Drake Law Firm, where our experienced team can provide the guidance and support you need.
We’re here to help you navigate the rocky terrain of divorce, ensuring that your concerns are addressed and your interests are protected. Give us a call today, and let’s work together to find a clear path forward in your divorce proceedings.