Talking about your debts can be as important as dividing your personal property in a New Hampshire divorce. Any debts that you took on during the marriage from your mortgage to student loans, can be subject to division.
However, credit cards are often the biggest source of debt-related disagreements in modern divorces. Perhaps one spouse had a credit card that the other didn’t even realize existed. There could be thousands of dollars in hidden debt that someone then wants help paying in a divorce. It is also common for those angry about an upcoming divorce to misuse credit cards, possibly maxing them out as a means of forcing some financial consequences onto their spouse.
Couples may argue bitterly over how they will resolve their credit card debts. What do you need to consider before agreeing to certain debt division terms with your spouse?
1. The possibility that they will default
The most important consideration when dividing debt is that the court order stating that one spouse is responsible for a debt does not absolve the other’s technical responsibility. If your spouse says they will pay your credit card debts, you may need to work that into the process of refinancing your house.
Making arrangements so that the accounts can no longer accrue an additional balance and get paid off as soon as possible in the divorce will be key to your protection. Otherwise, especially if your spouse files or bankruptcy after the divorce, you could end up responsible for those debts or taking a major hit on your credit if you refuse to pay.
2. Which debts are marital debts
The amounts that either of you owed prior to marriage will typically not be part of the property division process. The name on the account is not what matters. It is usually when someone took on the debt. However, there could be debts from during your marriage that are separate property and therefore not the responsibility of both spouses.
Debts that result from financial infidelity or intentionally withholding information from one spouse may not be part of the property division process. Debts that constitute dissipation or wasteful spending may also be separate property and not part of the marital estate. Finally, if someone racked up major debts while conducting an extramarital affair, those debts may also be their separate responsibility and not subject to division in the divorce.
Once you establish which debts are marital and which debts are separate, you can then start the process of negotiating their payments in addition to the division of your property. Keeping a focus on your long-term financial recovery and learning more about New Hampshire’s property division laws can help you better handle challenges in your divorce, like questions about how to split your credit card debt.
