The financial strain of a divorce often has its roots in the marriage itself, well before the coronavirus grabbed everyone’s attention and concerns. As one man said to me when he first called me after deciding to leave his wife, his voice heavy with sarcasm, “I guess our wedding vows should have been ‘Until debt or COVID do us part.’”
Like many other men and fathers in New Jersey getting divorced, we’re often asked about the debt the couple had accumulated during the marriage: A mortgage on the marital home and, increasingly, a summer or weekend place; plus car loans or leases, credit cards and lines of credit, and business debts if one or both people have their own enterprise.
Just as marital assets are divided in the divorce process, debt also is split. The pandemic will have nothing to do with how they are split up in the settlement.
Some debts can be dealt with fairly easily as in a situation where each spouse has their own automobile and signed for the loan on their own, or do not have a joint credit card they each use. But many of the financial liabilities of couples are more intertwined and more complicated to divide equitably.
Real Estate and Other Major Debts
If the marital home or other real estate is not sold, then the husband and wife continue to be responsible for paying the mortgage. In negotiating the settlement, we work to have the amount of the payment each person contributes based on their respective incomes. Historically, the husband earned more than his wife but this is no longer always the case. As more women have careers and own businesses, they may earn a larger salary than their husband.
Also, if both people signed for a car loan or lease, they are jointly responsible to pay off the obligation.
Where dividing debt can become especially tricky is when a couple have joint credit cards or a joint revolving line of credit. To help in negotiating your settlement, it is vital to get copies of the credit card bills from the previous few years. They can be used to demonstrate, for example, that after accounting for everyday items such as food or clothes for the kids, that 60-percent of the purchases were things your ex bought for herself; we strive to have her take responsibility for paying that portion of the credit card balance.
Business debt is another issue, especially if one spouse is not involved in the company or professional practice. In most instances, the spouse owning the business assumes the debt, as well.
What if She Doesn’t Pay Her Share?
We have dealt with situations where the wife remains in the marital home for any of a number of reasons and in the divorce settlement she agreed to pay a portion of the mortgage every month but doesn’t. It sometimes happens with an outstanding balance on a credit card, as well.
We’re starting to see more of this with so many jobs having ended or businesses closed for the duration.
The bad news is that the husband will be responsible for paying her share or the bank holding the mortgage or that issued the credit card will come after the husband. Paying her obligation is not only required legally; it is necessary to protect his credit rating.
The good news is that we can go into court to ask for an order requiring her to meet her obligation and to repay the ex-husband what he shelled out on her behalf.
Questions surrounding how marital debt is divided in a divorce can be complex. If you are a father in New Jersey contemplating a divorce, feel free to contact one of our family law lawyers at either 973.562.0100 in Nutley or, in Montclair, at 862.245.4620. Thanks to our electronic infrastructure, the Micklin Law Group attorneys for men and fathers are in touch with each other and the courts. Schedule a meeting in our virtual conference room with one of our family law lawyers here.
