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Dividing debt equitably in a Michigan divorce

Just like marital property, marital debt is divided equitably in a Michigan divorce. This refers to the debt that is acquired during the marriage, regardless of which spouse was responsible for the expenditure. While equitable division could result in an equal share of debt going to either spouse, there are a number of other ways that the debt could be distributed that would change the amounts allocated.

According to the Michigan Bar Journal, relevant factors in determining equitable divisioninclude the following:

  •          The length of time the couple was married
  •          How much each spouse contributed to the marital assets and debts
  •          What each spouse’s earning potential is
  •          The relations and conduct of each spouse during the marriage
  •          Common principles of equity

If a debt was incurred by one spouse to pay for expenses relating to a marital affair, that spouse would be responsible for the debt. When one spouse has been the primary wage earner and the other does not have the same earning potential, debt is often divided to reflect the ability of each to pay. One spouse may agree to take more of the debt in order to retain the property tied to the debt, such as a home or vehicle loan.

According to an article published on Forbes.com, student loans may be divided if the degree benefitted both spouses. However, earning potential and tax benefits or consequences may also be factors in determining whether the debt will be divided.

Creditors are not bound by the divorce decree, so if both spouses are named in the debt, they are both still legally responsible to repay it. If the spouse who is ordered to pay the debt defaults and the other must pay to avoid consequences, a court order may be obtained for reimbursement.

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Lorrie J. Zahodnic

"I will hold you up until you can stand on your own two feet."

Lorrie J. Zahodnic, P.C. has provided skilled and compassionate legal guidance to Michiganders in family law matters for over 20 years.

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