Division of Liabilities in Albany
When splitting up property during a divorce, one of the things that must be addressed is the issue of liabilities such as debts. Credit card debt, mortgages, and any other loan that had a marital-related purpose are subject to distribution between the spouses, while certain other liabilities, such as student loans, may be confined to just one spouse. A seasoned property distribution lawyer could help you with the division of liabilities in Albany, and ensure you receive an equitable share of your marital assets.
How is Liability Handled When Dividing Property?
Dividing liability plays out similarly to personal property or real property distribution. First, the parties must look at whether or not it is separate debt or marital debt. If it is determined to be marital debt, then it should be divided equitably.
Generally, if someone is keeping an item that is saddled with debt, then they are also going to keep the debt that is associated with that item. Equitable does not necessarily mean equal when it comes to debt. The parties would have to look at the circumstances surrounding how the debt was acquired, when it was acquired, and what it was for.
When determining who is responsible for a mortgage, the main question to answer is which party will be staying in the house. Mortgages are treated similarly to an item of personal property. If a mortgage exists, and one person will be keeping the house, that person will be responsible for the mortgage. Mortgages present one of the biggest divisions of liability in local divorce cases.
Credit Card Debt
Credit card debt is handled the same way that personal property is divided via equitable distribution. The parties would look at when the debt was acquired, what it was for, and then divide it based on equitable distribution standards regardless of whose name is on the card.
Shared Insurance Policies
Any sort of shared insurance policies would either be cashed out or divided between the two spouses, depending on what the policyholder allows at that time. Certain policyholders will allow a division or partial application to transfer the policies into two separate accounts under separate names.
Some policyholders will not allow that, meaning they either implement cash surrender or it is considered an item of personal property subject to equitable distribution. If that is the case, the policy is assigned to one spouse or the other based on what other circumstances of the equitable distribution exist.
What if Someone Has Previously Helped Pay Off Their Spouse’s Loan?
The spouse who incurred a debt would have to pay it off on their own if it is a separate property loan or an educational loan. Student debt is accrued exclusively for educational purposes, meaning there is no over-borrowing for marital purposes or living expenses, regardless of how the loans were paid off during marriage. The loan would remain the separate property debt of the other party if it was incurred exclusively for educational purposes for one’s spouse, even if it was incurred during the marriage. A person who incurred a debt would likely not be forced to pay back what their former partner contributed to it.
If it is a generic loan taken out in one person’s name during the marriage, was for marital purposes, and both spouses were paying on it, it is difficult for the non-named individual to argue that the named individual bears sole responsibility for paying off the loan. The arbiters of the division of liabilities in Albany would look to define the loan as either a separate or a marital property, and the loan would be considered as a liability which would need to be divided under equitable distribution standards.
Learn How to Divide Your Liabilities with a Property Division Attorney
While many couples will likely want to receive as much property as they can during a divorce, they will just as likely try to avoid being saddled with debts incurred during the marriage. A local lawyer could help translate the complex legal code so a person understands what they should expect in these circumstances. Call now to learn more about the division of liabilities in Albany.