You may have taken on a considerable amount of debt during your marriage. Such debts may include the mortgage on the family home, auto loans and joint credit card debt, among other financial obligations.
When it is time to part ways with your spouse, you may be concerned about your share of these debts, and rightfully so. Divorce is bound to change various aspects of your life, including your finances, and it helps to understand the position you will be left in when the divorce is settled. Here is what you should know.
Marital debts are divided equitably
North Dakota is an equitable distribution state. It means that if spouses can’t negotiate their own agreement, all the marital debt accrued during the marriage will be split by a judge between the spouses in a just and fair manner.
Under equitable division, the court starts from a presumption that the marital debt will be divided equally. A judge will then consider each spouse’s unique circumstances and needs before determining how much debt each will bear. You may end up with more or less of the marital debt than your spouse, which is how equitable division works.
You could still be liable for debts assigned to your spouse
It is important to note that divorce does not void existing loan or credit agreements. Should your spouse default on a joint debt the court assigned them, creditors can still come after you as a signatory. Your credit rating could also be affected.
Fortunately, there are ways around such possibilities, such as removing your name from the debt or having your spouse refinance it.
Look out for your interests during divorce
As mentioned, your financial landscape will likely change after divorce. Given the uncertainty of what lies ahead, you do not want to be left shouldering excessive debts. Therefore, you need to take a proactive role in your divorce and ensure that you safeguard your interests.