Division of Liabilities in New Jersey

In the context of asset division during divorce proceedings, a liability is any debt or loan that needs to be repaid on a continuing basis or in a lump sum. A liability is something that a couple is financially responsible for, and that responsibility will still remain after two spouses are no longer married.

If you are getting divorced and are realizing the extent of your shared liabilities while undergoing the asset division process, you should reach out to a knowledgeable property division lawyer. A qualified attorney could handle the division of liabilities in your New Jersey case and help you and your ex-spouse reach a fair agreement.

Types of Liability

There are many financial commitments that a couple may take on together that will still need to be upheld after their divorce. Some examples of these liabilities include:

  • Bank debt;
  • Credit card debt;
  • Mortgage debt;
  • Car loans;
  • Money owed to suppliers, such as accounts payable, wages, or taxes

A local attorney who is experienced in dividing liabilities during the asset distribution stage of a divorce could ensure that these debts are accounted for.

Dividing Debt

In the asset division process, it is important to identify what portion of the couple’s shared debt each party is responsible for. In some cases, it could be 50-50 between the two spouses, but there may be a disproportionate allocation of debt. This must be taken into account before the property is divided and numeric values are assigned to the debt.

There are different ways that ex-spouses could agree to pay off shared debt after their marriage. Often, debts like mortgages can be paid off by the sale of their shared property, or the payments will be divided equally or proportionally. In the case of credit card debt, the parties may agree to a certain arrangement to meet monthly payments, but they agree that one party will assume that debt, and that wouldn’t affect the property distribution. The ultimate distribution depends on the specific circumstances that are being analyzed and agreed upon.


A mortgage usually makes up a significant portion of a couple’s debt and can be the most complicated liability to divide. Often, if the two parties share a property and one party seeks to retain that property, they would have to purchase, or “buy out,” other party’s interest in that property. In this case, they would give their ex-spouse whatever equity they would be entitled to, usually within a specified period of time.

The second possibility is that the parties agree that one party will live in the home for a number of years, in which case, the mortgage can potentially remain in both names except they would agree on who is responsible for that mortgage during that time. In this circumstance, the house may be sold at a later date.

If the parties agree to sell the real estate, the mortgage would be paid off, as well as expenses to the bank, realty transfer fees, and taxes. After everything is paid, the remaining equity would be divided between the parties according to their agreement.

Ultimately, the handling of mortgage during the liability division process depends on whether the property is being sold or whether one party is buying out the other party’s interest in the property. A nearby legal professional could help the two parties determine how they wish to divide this liability and eventually pay off the debt.

Call an Attorney to Assist with Liability Division in New Jersey

Analyzing and distributing debt between you and your ex-spouse can be a challenging and stressful process. However, it is a crucial part of the asset division process, and it is important to ensure that every liability you and your former partner are responsible are taken care of after your divorce. A New Jersey lawyer could help facilitate an efficient and accurate division of liabilities in your case. Call today to schedule a consultation.

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