Concerns about dividing both marital assets and marital debts are frequently among the most hotly contested portions of a divorce proceeding for Michigan spouses. The ultimate property division not only affects ownership of assets but can affect the payment of spousal support or other settlement terms. Laws governing equitable division in Michigan work to ensure fair agreements but they cannot always prevent every challenge.
One potential area for problems to arise in down the road relates to marital debts. A current news story recommends that spouses work together to pay off as much of their debts as possible before they even initiate a divorce. The biggest reason for this advice is to prevent situations in which one spouse ordered via a divorce decree to pay a certain debt fails to do so—leaving the other spouse liable for the debt. Many people may be unaware that this could be the result, assuming that they have protection via their divorce decrees but that is not so.
Any agreement made with a creditor takes precedence over a divorce decree term. If one former spouse ends up having to pay a debt that was identified as the responsibility of the other spouse in the divorce decree, other terms of the decree could provide potential recourse. An indemnity clause would allow the first spouse to take the non-debt-paying spouse back to court in an effort to reclaim lost monies.
It is situations like these that can make what at first seemed like a straightforward divorce anything but. Working with a family law attorney might be a wise choice for a person facing a divorce. Doing so may help to prevent bigger problems in the long run.
Source: Huffington Post, “What Your Divorce Attorney Won’t Tell You About Marital Debt,” Cathy Meyer, March 2, 2014