A newly divorced couple looking at an array of documents on a desk

Dividing marital debt is typically one of the main sticking points in a divorce as distinguishing between marital and separate debt is challenging. By working with an experienced divorce attorney, you can resolve the division of marital debt quickly and expediently. 

At Aiello & DiFalco LLP, we have comprehensive knowledge of the applicable laws governing the division of marital debt. Our attorneys will work strategically to protect you from financial obligations that are not your responsibility. You can depend on us to help you reach a fair and equitable settlement whether through negotiation or litigation. Contact us today to set up a consultation. 

What Is Marital Debt?

Debts incurred during the marriage, even by only one of the spouses, are typically considered marital debt in New York and the equal responsibility of both spouses. Such debt includes:

  • Credit cards
  • Mortgages/HELOCs
  • Auto loans
  • Medical bills
  • Taxes
  • Student loans
  • Personal loans
  • Business debts

Like assets, marital debt is divided according to the rules of equitable distribution. With this in mind, it is a good idea for spouses to close joint accounts as soon as they decide to divorce. Doing so will prevent one spouse from incurring additional debt under a joint account for which the other spouse may be responsible.

What Is Separate Debt?

Separate debt is not subject to equitable distribution. This includes any debt incurred by one of the spouses before the marriage that has not become marital debt or debt incurred after the date of separation. Other debt may also be excluded from distribution for reasons such as: 

  • Debt incurred during the marriage but concealed from the other spouse (e.g., an undisclosed credit card)
  • Debt paid for with separate property and not attributable to a marital expense
  • Debt incurred for an extramarital affair
  • Student loans for a party rather than children are often separate

In short, separate debts are the sole responsibility of one spouse. 

Can Separate Debt Become Marital Debt?

Depending on the circumstances, separate debt can become marital debt during a marriage. For example, if one spouse enters the marriage with $20,000 in credit card debt, and the married couple pays down a portion of the balance with a joint account, the court will usually not give a credit to the party who helped pay down the separate debt. Decisions to pay down debt during the marriage are not second-guessed in a divorce.

How Is Marital Debt Divided in New York?

Divorcing spouses have a right to decide how to divide their marital debt as part of a settlement agreement and assign responsibility for specific debts to either spouse. This arrangement typically involves the court only for the approval of the settlement and to issue a final judgment. 

If the parties cannot agree, a judge will determine who pays the marital debt. 

In this situation, the court will consider each spouse’s income, marital assets, and other factors regarding the equitable distribution of marital property. To arrive at a fair division of marital debt, the court will also consider factors such as:

  • How much debt the parties owe
  • Why they acquired the debt (e.g. to make joint purchases)
  • How they acquired the debt (e.g. individually or jointly)
  • Which spouse benefited most from the debt
  • Which spouse is most capable of paying off the debt
  • Did the parties have a full economic partnership

Nonetheless, dividing marital debt is a complex process that can have a lasting financial impact on the parties post-divorce. Whether you decide to negotiate or litigate debt division, it takes an experienced divorce attorney to understand your circumstances and protect your rights.

How Aiello & DiFalco Can Help

Going through a divorce is often an emotionally charged process, and disputes can make dividing marital debt complicated. Rather than making hasty decisions just to finalize the divorce and move on with your life, let our experienced attorneys help you understand your rights and obligations. We can help you avoid the pitfalls of dividing marital debt and reach a fair and equitable distribution. 

While we often recommend that clients resolve the divisions of marital property and debts through negotiations, we will take your case to trial to achieve the best possible outcome. We will aggressively pursue your interests and work to protect your financial future in or out of the courtroom. 

Contact Our Experienced Marital Debt Division Attorney Today

If you are going through a divorce and have concerns about dividing marital debt, turn to Aiello & DiFalco, LLC. When you meet with us, we will help you understand how equitable distribution applies to marital debt and guide you through the process. 

We have a well-earned reputation as dedicated advocates who provide our clients with informed representation and caring, efficient service. Contact us today to speak with an experienced divorce attorney.