How Is Our Debt Going To Be Divided In A High Asset Divorce?
In a typical divorce, debt is divided equally. Obviously, if some of the debt with one particular party is associated just with their own expenses, you may be able to argue that some of that debt should be considered their own separate debt. It works a little differently in a high asset divorce case because a lot of the time, the high assets came about through the efforts of one party versus the other; one party makes very significant income.
Sometimes – even with high income cases – there is still credit card debt. If one party has very significant income and the other party, for instance, has very little income or no income, there is an agreement that the debt will be paid out of assets. Or, if there is some sort of compromise on either spousal maintenance or child support, then the higher earning spouse will assume the debt. Anything like that is subject to negotiation and is case specific.
Is There Any Way to Incur Your Spouse’s Business Debts in a High Asset Divorce Case?
One of the things that would be done within the settlement agreement is to itemize what the debt is and the spouse who owns the business would specifically assume that debt. There would also be an indemnification and hold harmless clause within the settlement agreement itself, saying that not only will the debt be clearly in the name of the business or the individual but if, for whatever reason, both parties are sued by one of the creditors, the non-debt holding spouse can counter sue the debt holding spouse for the debt and reasonable counsel fees.
What Could All Be Considered As Income When It Comes To Child Support & Spousal Support?
There are a lot of things beyond wage income that are considered income for support purposes. Among other things, investment income is considered income. Bonuses are considered income. If a bonus is awarded shortly after the year in which the divorce case was commenced but it was for the period of time that the person worked during their marriage, that bonus may be considered an asset and considered income for support purposes.
Rental income is income for support purposes. The court also has the ability of counting things like retirement benefit distributions, fellowships, or stipends. Even non-income producing assets, like business meals or a company car can be considered as impacting the overall support amount. If someone spends money on their business but then, their employer gives them money for that expense, it can be claimed as income for support calculation purposes.
For more information on Division of Debt in a High Asset Divorce, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling 914-368-7580 today.