Understanding marital and nonmarital debt

 

When it comes to divorce, one of the most contentious issues could be the division of debt. Understanding the difference between marital and nonmarital debt is crucial. This distinction could significantly impact your financial future.

The difference between marital and nonmarital debt

Marital debt typically refers to any financial obligations incurred during your marriage. This could include mortgages, car loans, credit card balances and other joint debts. Generally, both spouses  are equally responsible for marital debt, regardless of who made the purchases or took out the loans.

Nonmarital debt, on the other hand, is debt that one spouse incurred before the marriage or after separation. This might include student loans, personal credit card balances or medical bills from before the wedding. In most cases, nonmarital debt remains the responsibility of the individual who incurred it.

However, the lines between marital and nonmarital debt could sometimes blur. For example, if you use marital funds to pay off your spouse’s premarital debt, it could count as marital debt in some jurisdictions. State laws may vary regarding marital and nonmarital debt, so you may want to seek legal advice for clarity.

Protecting yourself from unwanted debt in divorce

Below are general suggestions you may consider to help protect yourself from debts that may not be yours during a divorce:

Document everything

You may want to keep detailed records of all financial transactions, including dates, amounts and purposes. This could help you demonstrate which debts are truly marital and which are not.

Close joint accounts

Consider closing joint credit cards and bank accounts as soon as possible. This may prevent your spouse from incurring additional debt in your name.

Monitor your credit

You may want to regularly check your credit report for any suspicious activity or new accounts opened in your name without your knowledge.

Communicate with creditors

If possible, you may want to inform creditors about your divorce. You could request that they freeze joint accounts to prevent further charges.

Seek professional help

Consider consulting an attorney who could guide you through the complex debt division process.

Understanding the distinction between marital and nonmarital debt and taking proactive steps to protect yourself could help you navigate the financial aspects of divorce more confidently.

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