Some couples overlook their household debts when making plans to split their marital assets. Pennsylvania’s equitable distribution law, however, requires dividing unpaid marital liabilities fairly.
As noted by Brides.com, the court may review joint and individual financial statements to determine how much each spouse owes. The remaining balances associated with marital debts generally belong to both spouses, and they may use them to negotiate a fair divorce settlement.
Spouses may need to work out or prove a fair debt division
The court may divide outstanding bills fairly even if an account had one individual’s name on it. When two spouses use an individual’s credit card for shared purchases, for example, the debt becomes part of the marital property.
Saved receipts showing who made the purchases and for what purposes could help in dividing debts fairly. If a spouse took out a loan to fund a separate business, for instance, a prenuptial agreement could prove that the proceeds financed his or her separate property.
Certain shared loans may lead to debt negotiations
Mortgages and car loans may require several negotiations when dividing them. If a spouse decides to keep an asset, the court may need paycheck stubs showing that he or she could afford the loan.
As explained by Mortgage Professional America, taking ownership of a home may require refinancing a mortgage and removing a spouse from the title. A refinanced loan, however, may include paying a spouse a fair portion of the loan payments made during the marriage.
Keystone State couples may need to draw up a detailed plan when dividing their marital debts and assets. Some individuals could end up paying a shared debt and others may take on a new mortgage. The final divorce decree, however, must reflect a fair division.