Divorce courts typically consider all debt as divisible between spouses, regardless of why the debt was incurred. So long as the debt was accrued during the marriage, it is generally considered a shared responsibility.
This can sometimes be a point of contention between divorcing couples, especially when one spouse believes they should not be responsible for paying off debt incurred by the other spouse. For example, if one spouse has a credit card balance of $10,000 that was used exclusively for personal expenses, the other spouse may argue that they should not be required to pay half of that balance.
In a divorce, the court typically awards each spouse half of the assets and debts accumulated during the marriage. However, in New York State, a law called Equitable Distribution allows for a more fair distribution of assets and debts. Under this law, the court considers various factors to determine what is fair in each case. If you believe your situation may warrant an exception to the general rule, you should speak with an attorney to explore your options.
For example, a Judge may agree that the wife should not have to pay for the husband’s clothing purchases in the two months leading up to the divorce, as he is the one who will benefit from them. Sometimes it depends on when the purchases were made and the purpose for them.
In divorce cases, courts generally don’t like to question how spouses spend money during the marriage. This is because there is a leading case, Mahoney–Buntzman v. Buntzman (2006), which says that such second-guessing by a Divorce Judge of how money was spent is inappropriate. Therefore, when making decisions about property division and alimony, Judges will typically defer to what each spouse says about their spending habits.
Consequently, debts are often split evenly between spouses – but “marital waste” is an exception. If one spouse can show that the debt was caused by wasteful behavior – such as gambling or spending lavishly on a paramour – they can argue the debt should not be shared (or at least not 50-50). Otherwise, debts are usually divided equally between spouses.
Common Reasons the Division of Assets and Debts Are Contested In New York State
People often contest assets and property in divorce proceedings. One party may have a pension, and they may feel that giving the other party any share of the pension is unfair. Another issue that arises is the convoluted formula of separate property credits. It can be difficult to determine who is entitled to certain separate property credits. Oftentimes, the proof can be problematic.
Some people contest assets, such as businesses, because they believe the value of the business or its “income stream” has been underestimated. Others contest asset distribution, feeling entitled to a greater share of particular assets. These are among the reasons why assets may be contested in New York.
“Good” Reasons to Dig Your Feet in On Division of Assets or Debt in A Divorce
It’s extremely rare for a court to refuse to divide a pension between spouses, even when one party doesn’t want to give a share. Similarly, when it comes to houses, courts will almost always divide the equity value between both parties unless there is a claim of premarital or separate property credit.
If you’re considering getting a divorce, one of the first things you need to do is figure out how to split your assets. This can be a complex process, but you should generally try to get a 50-50 split of the equity value. Other things, like bank accounts and investment accounts, should also be divided equally between the two spouses. If there’s no premarital credit, then each spouse should get half of these assets. However, if it’s a marital account, it doesn’t matter who put the money into it – both spouses are generally entitled to half of these assets.
Forming an economic partnership through marriage means that both spouses’ incomes become shared finances. Any money earned from a paycheck is considered marital money and is subject to being divided equally between the two partners – unless there is a good reason to do otherwise. It is the responsibility of the spouse who does not want an equal split to provide justification for their position.
For more information on the Division of Debts in A Divorce In NY, an initial consultation is your next best step. Get the information and legal answers you seek by calling (914) 362-3080 today.