The divorce process is often punctuated by moments of emotional and financial turmoil. Even if the relationship has ended amicably, making decisions based on the best interests of your children and the stability of your financial future can be stressful. Added to that, the divorcing couple must thoroughly examine their marital property to determine an equitable split of their assets.
Most couples immediately couch property division in terms of physical assets such as vehicles, the house, artwork or a book collection. Unfortunately, couples will also have to determine debt responsibility when designing their independent financial futures. In general, there are four types of debt that must be examined through the divorce process:
- Credit card debt: Probably the most common type of shared debt, credit cards impact nearly every couple. Generally, a couple will carry a joint credit card that must be either paid off and cancelled or transferred to only one party’s name.
- Mortgage debt: Owning a home together is a hallmark of many marriages. When divorce becomes a reality, however, the couple must usually sell the house and split the profit, or one party buys the other’s stake in the asset. In any event, the mortgage must be addressed.
- Vehicle loan debt: Dividing the remaining vehicle loan debt might be complicated based on usage and who’s name is on the loan. It can often be resolved much like the mortgage loan by either selling the vehicle or by one spouse purchasing the other’s portion of the debt.
- Medical debt: As an equitable distribution state, the rules around medical debt in Colorado can be confusing. While the medical procedure might have directly benefited one party, there might be an argument that it helped both spouses. As such, this debt must be examined during the asset and debt division process.
In addition to dividing physical assets and determining debt responsibility, the divorcing couple might face complexities centered around the division of digital assets, retirement accounts and deferred compensation. It is wise to seek the guidance of an experienced legal professional as you begin to navigate the divorce process. An attorney can answer your questions at every stage.