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Dividing debt responsibility during your divorce

On Behalf of | Nov 5, 2021 | Property Division

A divorcing couple will often focus on urgent financial matters such as property division, support and custody. Since these matters often require numerous negotiations, heated debates and compromises, many couples are happy to make it through to the end of the process. Unfortunately, they must pay careful attention to the equitable division of debt responsibility as well.

Rather than the community property standard, Minnesota follows the method of equitable distribution in the divorce process. This means that while not everything is split down the middle for a 50/50 division, both assets and debts are carefully examined to reach a fair distribution. Some debts that can prove to be stumbling blocks can include:

  • Shared credit cards: Over the course of the marriage, the couple will likely share one or more credit cards. Often, these cards are used for family expenses such as groceries, gifts or utility bills. As such, the judge will likely divide the debt between both partners no matter who opened the account or who accrued the most debt.
  • Medical debt: While medical treatment or a surgical procedure might have directly benefited only one spouse, the judge will often consider the remaining unpaid balance as marital debt in the overall property division determination.
  • Personal loans: It is often the case that personal loans carry both spouse’s names. Even if they do not, the court might deem that the two parties share the remaining balance of a personal loan to be marital debt.

The court will likely factor vehicle loan and mortgage payments into the physical asset division portion of the divorce, so the judge will likely not determine responsibility for these debts independently. In Minnesota, judges have a great deal of latitude in determining what constitutes an equitable division of both assets and debts. It is important to carefully maintain detailed financial records when preparing to pursue a divorce.

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