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Can divorce relieve you of debts?

It may be well known throughout Salem that financial struggles can be one of the most common causes of marital strife. If mounting debts have placed irreparable strain on your marriage, you may view a divorce as being more than simply a dissolution of your union, but also a method of debt relief (particularly if many of your liabilities are linked to your spouse). Yet how effective is divorce at absolving you of debt and helping you earn a fresh financial start?

If you are like most, then you may think that if a debt was accrued by your soon-to-be ex-spouse, or if he or she was the primary beneficiary of the assets that yielded it, such liabilities would be viewed as his or her responsibility. In New Hampshire, however, that often is not the case. The reason for this is that according to the state’s statutes, New Hampshire courts assign equitable property division in divorce. What that means is that any assets as well as debts accumulated during your marriage are deemed to be marital property, and thus should be shared equally. This may make sense in the case of debts assumed to buy your marital home, but what about perceived personal liabilities such as bank or credit card debts?

The court does allow you to present a case as to why you think a particular debt should be assigned to your ex-spouse. After hearing your reasoning, it will consider factors such as:

  •          The duration of your marriage.
  •          The potential each of you has individually to meet your liabilities.
  •          The contributions you both made to the marriage (and the accumulation of your assets and debts).

If you wish to bypass a court ruling, you and your spouse can instead try to come up with your own debt settlement. 

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