There are various complex steps required when a couple decides to end their marriage, one of the most contentious being the division of assets and debts. The same way that joint assets must be distributed between spouses, any debts incurred during the marriage must also be assigned to an individual during a divorce. The way that joint debts are handled during divorce can have various financial and other implications for both spouses. For additional information and to obtain skilled representation during your case, contact a skillful York County, PA property division attorney today.
Is Pennsylvania an Equitable Distribution State?
The way that assets and debts are handled during divorce depends on the state’s laws on property division. There are generally two systems or types of states, known as an equitable distribution state or a community property state.
Most states, including Pennsylvania, are equitable distribution states. Following this system, joint assets are distributed in a manner that is fair but does not necessarily have to be equal. Before dividing assets, courts will consider a variety of factors including each spouse’s income and earning potential, the length of the marriage, contributions made to the relationship, etc. Equitable distribution ensures that the split is fair and one spouse’s financial situation is not significantly harmed as a result of the divorce.
In community property states, however, all marital property is divided 50/50 between the spouses. Courts do not consider the specific circumstances of the relationship or the individuals, they simply split the property equally.
How Can Joint Debts Be Handled in a Divorce?
Assets and debts are handled in the same way during divorce. Because Pennsylvania is an equitable distribution state, courts will consider all aspects of each individual’s personal and financial situation before determining a fair and equitable distribution of joint debts.
Typically, one spouse will assume the responsibility of paying certain debts, and the burden of each liability will fall to only one individual. This ensures a clean break and a clear understanding of each person’s responsibilities. Courts may assign credit card debt to one spouse, for example, if they were the one who accrued it in the first place. They may then allocate another debt of similar value to the other spouse. However, even if one spouse accumulated a debt, if it benefited both of them and the other spouse is in a better position to pay for it, it may be assigned to them instead.
In other cases, spouses may choose to refinance or transfer their debt to take the other’s name off of the account or loan. The details will vary depending on the specific situation and there are many flexible solutions that can work for a variety of couples. For more information and legal advice during your divorce, contact a skilled family lawyer today.
