A divorce can be an emotionally difficult time for an Arizona resident. Not only do people need to make complicated decisions regarding the future of their family, people must also split their property.
In a community property state, like Arizona, this means that any marital property will be split equally between the parties. Marital property is property that has been acquired by the parties during that marriage that is not separate property.
What many people may not realize is that marital property includes debt. These debts include things like the mortgage on the couple’s house, credit card debt and car loans. Even in situations where one party took out the debt without the knowledge of the other, both parties can be held responsible for paying the debt. This means that creditors can try to collect the debt from either married partner.
In a divorce, this debt will be split. This means that certain debt will only be the responsibility of a certain spouse. In order to do this, it is important for both parties to understand all the sources of outstanding debt and how much is owed.
Following the divorce, it will be one party’s responsibly to pay the assigned debt. However, unless the debt is refinanced a creditor could come after either party since the creditor is not a party in the divorce matter. Therefore, it may be best for as much debt as possible to be paid off before the divorce is finalized.
Additionally, an indemnity clause in the divorce decree can help to protect spouses. This clause will allow a spouse to return to court to collect money from the other spouse, if that spouse fails to pay debt that was due.
When people need help dividing marital property, including debts, people may want to consult with a family law attorney. With the right legal help, people can secure their financial future.
Source: The Huffington Post, “What Your Divorce Attorney Won’t Tell You About Marital Debt,” Cathy Meyer, accessed Jan. 19, 2015