One of the many issues that occur among recently separated couples involves handling debts incurred throughout the marriage. With a typical relationship spanning years, it can be difficult to determine which party is legally obligated to take care of those debts. The following offers in-depth information on how debts are likely to be split up amongst each spouse, if they're split up at all.
Determining Responsibility under the Necessities Doctrine
Many states utilize the Necessaries Doctrine, based on the common law theory that a spouse (the husband, in most cases) is legally obligated to provide support for the other spouse. Under this doctrine, such support usually involves "necessary items" such as food, clothing, shelter and medical expenses. In some states, the spouse may even be compelled to liquidate their separate property to provide support under the doctrine.
Of course, there are exceptions. Some states have clauses where spouses are relieved of their obligations of support once legally separated, unless there's a written agreement in force that says otherwise.
Debts in Community Property States
In a state that recognizes community property, any and all debt incurred during the marriage belongs to both spouses. However, debts that are incurred after both spouses separate are considered separate debts belonging to the responsible spouse. Debts for assets purchased prior to the marriage also belong to the original owner of said asset.
Debts for medical expenses incurred during the marriage are likely to be split 50/50 between both spouses, even if the debt is only in one spouse's name.
Debts in Equitable Distribution States
In a state that recognizes equitable distribution, the courts may examine the financial history of both spouses to not only determine who undertook the debt, but also the level of responsibility that should be assessed to each party. In most cases, a spouse can expect to receive anywhere from one-third to two-thirds of marital debt, in addition to any property.
How a Separation Agreement Can Help
Separation agreements can make it easier for couples to decide who's responsible for what debt. Such agreements can be used to legally divide property, negotiate spousal support and even arrange for debt repayment.
For those in areas where legal separations aren't recognized, spouses can petition the court to essentially stop the clock on debt by preventing new debts from being formed during the divorce. Any new debts incurred belong the spouse responsible for incurring them. For more information, contact a firm such as Myers Law Firm LLC.
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