Divorce involves not just dividing up the marital assets acquired during the marriage. Marital debt like credit card balances, mortgages and car loans must also be addressed. Understanding how these debts are divided in Michigan can help you prepare for what lies ahead and protect your interests.
First, it helps to understand that marital debts are not necessarily split equally. While you may end up with equal portions, Michigan courts aim for a fair division considering several factors. These include:
- The financial situation of both parties
- Each spouse’s contribution to the marriage
- The earning capacity of each spouse
- Any other factors in the interests of fairness
Considering these factors, the court may allocate more marital debt to the spouse in a stronger financial position.
You don’t have to leave it to the court
If you and your spouse agree on dividing your debts, you can outline your terms in a divorce settlement and submit the agreement to the court for approval. This can give you more control over the outcome and save time. However, creditors are not bound by such divorce agreements; they can still pursue you for joint debts assigned to your spouse.
Protect yourself from post-divorce debt issues
You do not want your credit score to take a hit after the divorce due to your ex defaulting on their portion of marital debts. Taking proactive steps like closing joint accounts, refinancing shared debts into the responsible party’s name and ensuring all debt responsibilities are clearly outlined in your divorce agreement can help protect you.
Equally crucial is seeking legal guidance to help you understand your rights, negotiate fair terms and draft a legally binding agreement that protects you if your ex fails to pay. This can prevent costly financial headaches down the road.