Divorcing couples in Asheville, North Carolina, typically devote much time and effort in deciding how best to divide their assets. It is a critical part of a divorce, but there is one other crucial topic to address during the property division stage of divorce: The marital debts also have to be divided.
Dividing up the marital debts can be just as complicated — and just as important — as splitting up the assets, particularly when there are big dollar figures involved.
What are some debt division options?
A court must approve your debt and property division arrangement in North Carolina, an equitable division state. However, most courts encourage couples to create an equitable (fair, but not necessarily equal) plan on their own when possible. Three debt division options to consider include:
- Pay off debts ahead of the divorce. Couples with wealth and valuable assets often opt to pay off as much debt as possible before divorcing to minimize property division complications.
- Take the debt yourself. Some couples agree to leave one spouse with most of the debt in exchange for a larger share of the marital assets and property — or simply because one spouse can better afford the losses.
- Share debt responsibility with your spouse. Finally, many high-asset couples agree to share responsibility for the marital debt. However, if your spouse falls behind on their debt responsibilities, your creditors can still come after you for the debt.
Matters involving debt require thoughtful consideration, especially if you earn less or have far fewer financial resources than your spouse does. It is also wise to make sure you understand how debt and property division works in North Carolina.