Dividing property in divorce is only half the story because you need to figure out what will happen to marital debt as well. You should be aware of how you will deal with credit card balances, mortgages, car loans, and more.
Some conflicts regarding which spouse should be responsible for the debt repayment can make your divorce more complicated, especially if one spouse has more debt than the other.
Understanding the treatment of marital debt in an Indiana divorce will help you prepare for the consequences of ending your marriage.
How will marital debt be divided in Indiana?
According to Indiana Code § 31-15-7-5, equal division of marital property is presumed to be just and reasonable. However, each spouse can present evidence to prove why equal division of marital property is not fair.
Indiana follows a system called equitable distribution. As a rule, Indiana is known as a “one pot” state in terms of marital property. This means that any assets and debts acquired before or during your marriage can be used to assess the value of your marital property.
Several factors can be taken into account to divide marital property and debts. These include:
- Financial situation of the spouses
- Circumstance regarding the property acquisition
- Contribution to marital property acquisition
- Dissipation of marital property
- Parties’ conduct concerning the disposition and dissipation of marital property
The equal division of marital property doesn’t mean (necessarily) that both spouses will have to share 50% of the debts.
Which debts can be considered in an Indiana divorce?
These debts can be considered during an Indiana divorce:
- Credit card debt
- Mortgage debt
- Vehicle loans
- Personal loans
Depending on the circumstances, different approaches to splitting the debts can be applied.
Can the divorce decree help protect you from creditors?
It is worth mentioning the difference between dividing debts in a divorce and your contracts with creditors.
For example, you may not be required to pay off credit card debt under the divorce decree. However, you might still face a creditor lawsuit since they have not signed any contract with you.
In addition, even if your spouse pays off the mortgage according to the divorce decree, you still remain obligated to the bank under your contract.
However, there are certain steps like refinancing, closing joint accounts, and others that you can take to avoid trouble with your creditors in the future.
Talk to an Indiana Family Law Attorney Today
Chris Arrington represents the interests of those pursuing a divorce in Indiana. Call our office today to schedule an appointment, and we can begin discussing your next steps right away.