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Debt and divorce

When you file for divorce in New Hampshire, you can expect to split not just your assets but also your debts. This process can be rather confusing, especially in an equitable division state, where there are multiple factors that affect how a judge will rule on the issue of asset and debt division.

How division works

The first thing to know is that asset division starts off with the judge assuming an equal division. Each party will then present arguments as to why it is in the interest of fairness to divide the property differently. The other guiding principle is that each spouse keeps income he or she brought in and any property that he or she owns solely. This is also not absolute, as there can be many reasons why having a spouse's name on the title does not make it fair for him or her to keep it.

Because New Hampshire is an equitable division state, the basic principle is fairness to all parties. This means that, rather than black-and-white rules, there are presumptions that can be overturned by reasoned arguments and evidence. Judges do not just look at what is on paper. Instead, they examine the totality of the circumstances before arriving at a decision.

How division rules apply to debt

When it comes to debt, there is an additional consideration: the creditor. In dividing marital debt, a judge needs to be fair to both spouses and also to this third party, who is entitled to repayment. Generally, the spouse who incurred the debt owes the debt. The exception is debt that was taken out to pay for a necessity for the entire family, in which case the creditor may be entitled to come after jointly owned assets.

There are several important factors that can affect a fair division of debt and property. They include the length of the marriage, the role of a particular spouse in gaining an asset or incurring a debt, how much say the other spouse had, both spouses' likely future prospects, their health and the needs of any children of the marriage. In some cases, one spouse can also be liable to the other for wasting assets (for example, gambling losses). Properly establishing the value of all assets is important, including taking into account factors like tax consequences. Two pieces of property may look substantially similar on paper, yet one may have less value if it is difficult to liquidate or would be taxed at a higher rate.

An experienced family law attorney can help you navigate the complexities of property and debt division. Whether you plan to file an uncontested divorce and a property agreement or you want to litigate division in court, speaking with a lawyer can help you figure out the best approaches to take.

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