Dec 14, 2020

Dividing property in divorce - things to consider

Man and woman sitting on a couch thinking about dividing property in a divorce
Divorce is considered one of the most stressful situations in life. Most partners have marital property, and whether it is a house, a car, furniture, or other things, dividing them usually won't be an easy and quick process. If you and your spouse have joint debts such as a mortgage, car loans, credit card debts, and personal loans - those are marital debts that you are both responsible for, despite the divorce. This article can help in addressing some dilemmas about dividing property in a divorce.

Fair division of marital property in a divorce

The best option for dividing property obtained during your marriage is to agree with your partner. In case you can't agree, the judge will decide fairly. Dividing property fairly in a divorce means that each person will get about half of everything. However, the judge can rule it is fair to divide it in some other way, depending on the case. It usually happens if they realize one person is more at fault for the marriage ending or that one person needs more property for any reason. You may get more marital property but also more marital debt. Having a title or deed with your name doesn't mean it's entirely yours. If it was acquired in marriage, both of you are the owners, unless it was a gift or inheritance, which is usually separate property.

What about the individual property?

Your personal property gained before marriage stays yours in most cases. The exceptions when the personal property is divided in divorce are:
●    If the other spouse contributed to getting the property, growing it, and improving it.
●    When the other spouse's share of the marital property is not enough to meet their needs.
●    In case that the separate property was regularly used for marital purposes.
●    If the separate property was placed in a joint bank account.
●    In case your parents regularly gave you money to pay the mortgage on the house you shared with your spouse, that gift became marital property.

Determining by yourself if the property is marital or separate may be very complex and cause you many headaches, so you should speak to a divorce lawyer about it. If you are on a low income, check if you qualify for free legal services in your area.
Woman talking on the phone with a confused expression
Knowing whether a piece of property is marital or separate may be very challenging

Dividing marital debt fairly

In most cases, each spouse becomes responsible for a fair share, about half, of the total marital debt. There are, however, some exceptions when the unequal division of the marital debt can happen. Usually, it happens in one of these situations:
●    If one person is more at fault for the marriage ending
●    When one spouse is able to pay more
●    If one person is responsible for incurring debt without the other's consent, for a specific purpose that didn't benefit the household.

Separate debts

If you had debts before marriage, those are your separate debts. In most cases, all debts acquired in marriage are considered marital debts. Who made the actual purchase or whose credit card was used makes no difference. There are some exceptions to this general rule:
●    If one person has a gambling debt.
●    When one spouse spent money on extramarital affairs.
●    If one has spent money on restitution in a criminal case.
●    In case of taking out student loans during a marriage, only for one spouse's education.

Who will stay in your marital home?

In case you have minor or dependent children, the parent who has primary custody usually gets to stay in the marital home. That spouse still needs to consider if they can afford to pay the remaining mortgage and other costs related to the property. Sometimes, the best option is to sell the marital home and divide the profits.

After the divorce is final, you may wish to move away and start over in a new place, which can be a great decision. Just allow yourself enough time for packing, finishing paperwork, and other obligations related to this significant life change. Moving to a new city alone after a divorce will be challenging, but it's an opportunity for a new and fresh start.
Man in black suit and woman in black dress arguing
If you decide on selling the marital home, you can start a completely new life chapter in a new city.

What about your creditors?

An essential thing to know is that the judge responsible for your divorce case does not have authority over your creditors - people you owe money to. The Judgement of Divorce can assign each debt to one of you, but your creditors may continue to treat those debts made in both of your names as a simple joint debt. When all debts in both of your names are included in your Judgement of Divorce, and the person ordered to pay the debt doesn't do so, the other can get an order enforced by the judge. If you find yourself paying a debt assigned to your ex-spouse, file a motion asking the judge to order your ex-spouse to repay you.

Try to agree with your ex-spouse

We all know how lawyers, court hearings, and mediation are expensive. If your assets and debts are easy to understand, it would be best first to try to agree with your ex-spouse and work out property settlement on your own. Keeping your costs low can mean a lot when you're divorcing.  Try to negotiate, calmly, by listing all your debts and properties and agree on dividing them. You'll still need a judge to review your settlement and make sure it is fair, but they usually approve once you have consented.

If you've agreed to sell the marital home and both of you will relocate to another place, make sure to ask for a moving estimate on time and to make a relocation budget accordingly. You can easily make all kinds of agreements with about storing items and transporting them safely to your new home.

Having reliable help in these challenging times will mean a lot and make it easier to for you to move on after the divorce.
Man and woman walking on the sidewalk talking
Try to agree with your ex-spouse and work out property settlement on your own.

How does the judge decide?

If you simply cannot agree, or if your debts and assets are complex, a lawyer will help you, and the judge will eventually decide about dividing property in the divorce. They will consider many factors, such as:
●    How long your marriage lasted
●    Your age, physical and mental health
●    Why you are getting a divorce and if one spouse is more at fault than the other
●    What each of you contributed to marital properties - financial contributions and all others
●    Each one's financial needs
●    Earning potential of both spouses
●    A parent who'll have custody over children may have a bigger need to live in the marital home or own it

You can eliminate the big part of the divorce stress by knowing what things to consider and what strategies you can use. We hope this text will help you along the way of dividing property in a divorce.

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