Navigating the ins and outs of assets division during a divorce can be one of the most challenging tasks you might face. Beyond marital properties, you must also tackle one of the most emotionally charged but equally important divorce issues: the division of debt.
Your shared debt can significantly impact your financial circumstances even after the legal proceedings have long ended. Thus, understanding how to manage these liabilities is vital in securing your financial health post divorce.
Understand how your state views debt
Florida is an “equitable distribution” state, which means that courts divide debt in a way they deem fair, and this does not necessarily mean equal. This can depend on each spouse’s ability to pay the debt, their economic circumstances and other factors.
Identify which debts are shared
Before going through the assets division, determine which debts are marital and separate. Shared debts include all the balances you and your spouse accumulated throughout your married life. These may consist of credit card debt, car loans and mortgages.
Consider the impact on credit scores
If both your and your spouse’s names are on a credit card or a mortgage, it is essential to remember that you are both responsible for it in the eyes of lenders, and no divorce proceeding will ever change that. If payments on joint accounts are late, it can negatively impact both your credit scores. Consider closing these shared accounts or coordinating with your spouse to divide and transfer the balances to their account.
Efficiently overseeing the division of your assets and debts during a divorce can be challenging. Still, it is one of the most critical parts of ensuring financial security and moving forward after this difficult chapter.