Marital Debt

One of the most common issues that comes up in North Carolina divorces is the division of marital property. However, a related but less-talked-about issue is how courts split up a couple’s debt. At the Olsinski Law Firm, PLLC, our knowledgeable team of Charlotte divorce lawyers has decades of experience helping clients effectively navigate the divorce process to ensure they are not saddled with unnecessary debt that prevents them from moving on with their lives after a divorce. We understand that the fear of being in debt after a divorce can dominate your life, and we are here to help ease your fears and help you reach a solution that works for you.

North Carolina courts use the concept of equitable distribution to divide both debts and assets. While the court is required to start with the assumption that an even split is equitable, either party can present evidence to show that the equitable solution requires an uneven division of a couple’s debt obligations. For example, if one spouse earns a significantly higher income than the other, the court may determine that the higher-earning spouse should take on a larger percentage of the couple’s debt.

Similarly, a court will consider when the debt was incurred. For example, if one spouse went into debt towards the end of the marriage without the other spouse’s knowledge or consent, the court may assign that debt to the spouse who took it on. Depending on the situation, a spouse may consider taking legal action to prevent the unnecessary waste of marital assets.

Courts assume that both spouses will act in the best interest of the marital estate, regardless of personal differences. So, if one spouse is accused of wasting marital assets, selling them at below market value, or hiding assets from their spouse, the court will take these allegations into account when dividing up the couple’s debt.

Additionally, a spouse who is not engaged in reckless spending may be able to seek an injunction from the court to prevent their spouse from wasting marital assets. An injunction is a court order prohibiting someone from doing something; in this case, spending marital assets in a way that harms the value of the marital estate.

The easiest way to divide marital debt is through a marriage settlement agreement. A marriage settlement agreement is essentially a contract between the spouses that outlines all of the issues that the couple has agreed upon. Even if you and your spouse can’t agree on everything, such as child custody or alimony, you may still be able to agree on how to divide up debt. This can reduce the cost of a North Carolina divorce and reduce the amount of time it takes for the divorce to become final.

Of course, few couples start off thinking they will be able to reach an agreement on such emotional issues. However, having the assistance of an experienced Charlotte divorce lawyer can help couples bridge the gap between them in hopes of reaching a solution that works for both sides, either through negotiation or mediation.

If you are considering divorce, but worried that your spouse’s debt might unfairly be attributed to you, don’t let that stop you from speaking with an attorney to learn more about your options. At the Olsinski Law Firm, PLLC, we’ve helped countless clients reach seemingly unascertainable agreements with their former partners that lift many of the financial burdens associated with divorce. However, as experienced trial lawyers, we’re also prepared to litigate your case if your spouse is unwilling to agree to a fair solution. To learn more, and to schedule a free consultation with a Charlotte divorce lawyer, give us a call at 704-405-2580. You can also reach one of our Concord family law attorneys at 704-918-4747. We represent clients in Mecklenburg, Gaston, Cabarrus, Iredell, Rowan, and Union Counties.