What You Should Know About Division Of Debt Under A Michigan Divorce

Going through a divorce cannot only be emotionally harrowing, it can be confusing if your understanding is unclear on how the debts of you and your spouse are divided. Not only does the judge rule separately on the marital and non-marital debts of the separating couple, they also consider extenuating circumstances. Other factors can also affect the decisions on property division by Michigan lawyers and knowing the details makes the process clearer.

Creditors Can Challenge Debt Division Orders 

If a judge rules that a debt is the sole responsibility of only one spouse, the creditor is free to challenge the judgment. Regardless if both spouses co-signed a contract or the agreement was only entered into by one party, the creditor has the right to collect what’s owed to them by either spouse or both, using any legal remedies for collection. The only way the non-paying spouse can challenge the paying spouse is through filing a contempt of court claim.

Marital Debts Incurred By Misconduct

Marital debts incurred by misconduct, not necessarily illegal activities, may be deemed the greater responsibility of the erring spouse. If debts during the marriage were created by paying for an illicit partner of a married person, gambling, legal fees to fight criminal prosecution, etc., a court may place the repayment burden solely or more substantially on the spouse who accrued the debt.

Fair vs. Equal Division of Debt

In Michigan divorce court, the judge is bound by law to split assets and debts “fairly” but not necessarily equally. For example, if one spouse is employed outside the home and the other spouse maintains the home and raises the children without earning wages at a traditional job, judges frequently rule that it would be unfair for the generally unskilled and less educated partner to be expected to earn wages adequate to repay half the marital debts.

The More You Get, The More You Pay

Judges may rule that the spouse who is awarded the bulk of the assets should also pay a greater portion of the total marital debt. This decision is most common when one spouse receives a significantly more substantial portion of the marital property such as a house and has to take over the mortgage payments.

Personal Account Exemptions

One common misconception is that payments on personal credit cards issued to only one spouse are their sole responsibility. Regardless of the name on the card, a judge can order that both spouses in a divorce are accountable for paying a prescribed amount of the debt.

Short Marriages Can Affect Settlements

If a marriage has lasted an inordinately short time, typically five years or less, a judge may attempt to restore both parties to the financial positions they were in before the union. This is typically achieved through dividing the couple’s debts so each has about the same amount they had upon entering the marriage.

For more information about division of debt under a Michigan divorce, contact the Gucciardo Law Firm at 248-723-5190, visit our website at https://gucciardofamilylaw.com or submit your questions to us at info@gucciardofamilylaw.com.