When you hear the words “equitable distribution” you probably think about the division of your marital assets, such as your home, the cars, and the antique vase that has been in your family for four generations. In reality, equitable distribution is as much about the debts you acquired during your marriage as it is about assets.
This is important because the very same factors the court applies to determine the distributions of assets are also applied to the distribution of debts. These factors are numerous, and include but are not limited to: the duration of the marriage or civil union, the age and physical and emotional health of the parties, the income or property brought to the marriage by each party, the standard of living established during the marriage, relevant pre or post nuptial agreements, the economic circumstances of the parties at the time of the division of the property, the income and earning capacity of the parties as well as their educational background, training, employment skills, work experience, and responsibilities for their children, and any other factor the court deems relevant.
Applying these factors to a real world scenario, imagine there is a family of four with one parent who primarily stays home to care for the two children, while the other parent works full time and earns a substantial amount of money. Both parents contributed to the accumulation of their credit card debt. The stay at home parent used the credit card to purchase groceries and pay the utility bills, while the working parent used the credit card for gas charges and other essentials. There is no doubt both parties are responsible for the debt, but one party is clearly more capable of paying the debt than the other party. In this scenario, the court would likely assign the debt to the working spouse, as he or she would be able to pay it off.
If both parties are working, the debt may be divided equally between them. The exception would be if one of the parties used the credit card for purchases unrelated to the marriage. Examples of debts that are not subject to equitable distribution include the use of marital assets to commit adultery, to finance gambling, or for services that are completely unrelated to the marriage, such as personal massage or cosmetic surgery.
If you are concerned about the distribution of debt following your divorce, contact the offices of Villani & DeLuca today at (732) 965 – 3350 for a free consultation. Our experienced matrimonial attorneys can help you review your finances, preparing you for any eventuality.