When you and your spouse get a divorce, you need to divide the assets that the two of you own together. This process is commonly referred to as property division. It can include dividing tangible assets, like cars and homes, and dividing financial assets like bank accounts and investment portfolios.
But you also have to consider the debt that the two of you have. Are you going to be liable for any of your spouse’s debt and will you need to divide this along with your assets?
Are you a cosigner on the loan?
One thing to consider is whether or not you cosigned on the loan and so you have some obligation for it. For example, perhaps you both applied for a home mortgage jointly in order to be approved for a larger loan. You are both responsible for paying, so you need to divide that debt or pay off the full balance together.
Another example could be if the two of you have a joint credit card account. Whether it was you or your spouse who swiped the card, every purchase is a liability that both of you have to consider.
Do you have a prenup?
Another important question to ask is whether or not you have a prenuptial agreement, which can be used to assign debt to each individual. For example, some couples will use prenuptial agreements to show that they should have no responsibility for a partner’s student loans, business loans or other extensive lines of credit. If you know that your future spouse plans to go to graduate school or something of this nature, you can use the prenup to ensure that you don’t have to take on a portion of their loans in a divorce.
As you can see, this process could be quite complex, so it’s important to know about all of your legal options.