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Business Debt Issues In A New Jersey Divorce

Marital debts may be incurred when a business is started during the course of the marriage and is either run by both spouses or operated by one spouse with the support of the other spouse. If the business venture has failed and has incurred a great deal of debt as a result of the failure, the debt is to be shared by both parties. If the business was operated by legitimate and legal means, and the spouse who handled the supervision of the business gave his or her best efforts in regard to keeping the business afloat, then both parties must be held responsible for the debt. For example, if the martial business centers around a farm which the husband maintains and the farm is a monetary failure due to weather or other factors, then both the husband and wife are responsible for the debt incurred. As long as the operating spouse has run the business in what the legal system calls ‘good faith', then both parties are held accountable for the debt.

When Are Business Debts Non-Marital?

open business sign

In New Jersey, business debts are considered non-marital debts if one spouse can show that the business was not operated in good faith. For example, if a wife who is running a business forged her husband's name on credit card applications that were used for business purposes, the husband is not responsible for that debt. Additionally, if a husband borrowed money to start a new business and borrowed the fund's without the consent of his wife, then the wife is not responsible for the debt incurred either by the loan for start up costs, or for any debt incurred by the business.

If the business was successful, this issue of the allocation of debt may never arise. For the most part, disputes over business debts between two divorcing parties arise when the business is showing a negative net worth during the course of the divorce proceedings. Then, it is up to an attorney to show in some way that the business was not operated in good faith, and therefore, one spouse should not be held accountable for the business debts of the other spouse.

Contact Villani & DeLuca, P.C.

If you and your spouse are contemplating divorce and you own a business together or one of you operates a personal business, this issue of business debt may very well arise during your divorce proceedings. It is important that you speak with an attorney about the debt incurred by any marital business and to be upfront regarding whether or not the business has been operated in good faith since its inception. Our law offices can provide you with the guidance and assistance you need when it comes to navigating the issue of business debt in the midst of divorce proceedings. We will work tirelessly to ensure that you are not held accountable for debts that built up due to non-compliance with good faith business practices.


Villani & DeLuca, P.C. serves Ocean and Monmouth County residents and our experienced and trained attorneys are here to provide you support as you undergo what is certain to be a difficult and life changing process. Contact us at 732-751-4991 to discuss your options.

Vincent DeLuca, Esq.

As a founding partner at Villani & DeLuca, Vincent DeLuca is one of only a few Certified Matrimonial Law Attorney in Ocean County, New Jersey. Mr. DeLuca has helped many clients navigate the delicate details of their own divorce. Mr. DeLuca is also a trained divorce mediator and collaborative divorce attorney. Call today at (732) 751-4991 to speak to Mr. DeLuca or one of our experienced NJ Divorce Lawyers.

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