How Is Property and Debt Divided in a Michigan Divorce?
During the course of a marriage, even a relatively short one, you and your spouse might accumulate a lot. Not only could you build a life that includes homes, cars, furniture, bank accounts, and a lot of other assets, but you might also rack up quite a bit of debt in the process, including a mortgage and any number of loans. It’s important that you understand your property and debts alike are joint, because you’ll have to separate them during the divorce process.
Michigan laws regarding division of property during a divorce are fairly clear. Here’s what you should know about how property and debts are divided during Michigan divorce proceedings.
Fair Division of Assets
Michigan requires fair division of assets in divorce proceedings, and this generally means divorcing parties will split property and debts alike right down the middle (or close enough). There are, of course, instances in which this doesn’t happen, such as when one party agrees to take on more debt in order to retain more property.
For example, a spouse that wants to remain in the marital home might elect to assume the remaining burden of debt associated with the mortgage. Arrangement like this could still be considered a fair division of property if both parties agree to the terms.
Does Fault Play a Role?
In most cases, no. There are some instances in which one spouse is considered to have more fault in the divorce, such as if the marriage was somehow fraudulent. This could potentially result in an unequal division of assets or debts, but that is up to the judgment of the court.
If one spouse is deemed to be at greater fault for creating debt, or one spouse is able to pay more, for example, the court could also decide on an unequal division of assets or debts. If one spouse were to rack up gambling debts, for example, these would not be divided as part of marital debts. However, by and large, you should assume that a court will equally divide marital assets and debts.
What is Separate Property?
Spouses may enter into a marriage already owning property like a home or carrying debts like student loans. These are not generally considered when it comes to division of property and debts in the course of a divorce. Property inherited during the marriage is also considered separate. If, however, property gains value during the marriage, that gain may be considered marital property.
Once a judgment is made, you must still take steps to divide your property. If you are allowed to keep a home or car, for example, it’s up to you to transfer applicable titles or deeds – the court does not do this for you.
In addition, you should know that a court decision to divide marital debts doesn’t necessarily stop creditors from continuing to treat them as joint debts. You may therefore be on the hook for the full amount with creditors if a spouse refuses to pay. However, you can try to get the order enforced by the court, or else file a motion for reimbursement.
Division of property can be a complex process, but the experts at The Gucciardo Law Firm are ready guide you through. Contact us today at 248-723-5190.
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