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Filing for divorce? Don't forget about your debt

The house, investments and even the living room furniture -- New York couples usually expect to address the division of all of these assets during divorce. But what about debt? Most Americans live with at least some level of debt, including credit card balances. Still, even though the vast majority of couples who decide to divorce are walking around with credit cards in their wallets, the idea of separating this debt during a divorce is rarely thought of beforehand.

Assessing debt should be done early on in the process, when individuals are still gathering important financial documents in preparation for the asset division process. Unfortunately, doing so can sometimes be an unpleasant surprise. Many spouses are shocked to learn of secret credit cards or excessively large balances on certain cards that they rarely used. When this happens, one party often feels as if he or she should not be held responsible for resulting debt, and that the other should instead be forced to be bear the financial burden alone.

In reality, debt occurring during a marriage is almost always viewed exclusively as a marital asset. As a marital asset, the responsibility to repay the debt must be divided between both parties. Repayment responsibilities might not always be equal in the sense of both parties paying exactly half, but the division is usually viewed as fair and reasonable for both parties.

Credit card repayment will be included among other divided assets in a final divorce settlement, but this agreement does not necessarily mean much to creditors. For instance, if an ex-spouse is responsible for paying off a card that lists both parties on the account, either person can be held responsible for missed or past due payments. With financial credibility and credit scores on the line, it is often a good idea to get an idea of the debt situation as early on as possible. Doing so typically allows for divorcing couples in New York to create the best possible division of debt for their personal situation.

Source: wvgazettemail.com, "When Divorce Happens: How to divide credit card debt", Lyne Ranson and Brittany Ranson, Jan. 23, 2016

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