How is Debt Divided in a Divorce?

In New Jersey, the process of equitable distribution seeks to fairly divide assets and who is responsible for debts.

Separate or Marital Debt

Debt can fall into one or two categories, separate or marital. Separate debt usually refers to any debt that a spouse accumulated either before the marriage or after the divorce is filed, or even after the parties’ separation, provided that the debt was incurred without any benefit to the other spouse. Marital debt is any debt that was accumulated during the course of the marriage for the “benefit of the marriage.” Marital debt includes, but is not limited to, mortgages on the home or vacation homes, loans, business debts, bankruptcy, and payments on a car. The court has the right to determine what marital debt was meant to benefit the marriage. For example, debt incurred by gambling may be ruled as separate debt instead of marital debt.

How Is Debt Divided in New Jersey?

New Jersey is an equitable distribution state, which means that the courts attempt to divide assets and allocate debts fairly. When dividing debt, the court considers multiple factors such as the length of the marriage, the health and age of the spouses, their income or property, their standard of living, prenuptial agreements, and more. New Jersey will usually not use marital fault or misconduct as a factor in dividing debt unless it directly corresponds to the debt. For example, a spouse using marital assets to spend on an affair will often be held responsible for a larger portion of the debt.

Contact a New Jersey Divorce Attorney Right Away

Our divorce lawyers have years of experience handling the equitable distribution process.  If you are involved in a divorce and need assistance dividing your debts or would like to know more about the divorce process, contact our firm immediately.