Division of Assets and Debts During Divorce

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As a newly-married couple, you and your better half probably never wondered about what you shared or how you would pay off your bills and loans after a breakup. When your marriage slips into crisis and you see no other way out than to end your relationships, you should prepare yourself for the rough days during which you will have to divide everything you two have once shared during your marital life.

You and your partner may own a large house, a few cars, insurance, jewelry, etc. These assets are known as marital ones. Similarly, you two may also have debts, such as auto and home loans, credit card bills, and so forth. These are marital loans that should be paid off by you and your ex-spouse. Dividing those assets and loans is an inherent part of every case, no matter whether it is an easy divorce online or a contested divorce that goes to court.

Ideally, two married people can find common ground to settle their issues. When they cannot reach an understanding for some reason, hiring an attorney is inevitable. Moreover, they may even want their case to go to trial where a judge will settle their matters for them. Usually, three key factors will shape the way in which you will divide your belongings.

Type of Divorce

Even though some couples don’t get any chance to choose the type for their case, there are some options for those who strive to resolve their problems amicably. For instance, when it is an uncontested divorce, both sides don’t have any claims against each other and thus can easily benefit from filing for divorce online. This is how they can avoid a trial. This way of ending marital relationships is much cheaper than having a contested divorce.

The latter is what comes to mind first when we think of a tough divorce. In this case, partners that want divorce apply for it themselves, and if their spouses don’t respond, their cases are qualified as uncontested ones. When there is much disagreement between partners, they struggle to work together and thus cannot settle their issues amicably. Hence, every party is represented by a lawyer, and the case is overseen by a judge until it is resolved.

Other types of divorce that involve mediators and arbitrators are not resolved in family court. That’s why they are perfect for those who cannot go without a third party being involved in their case but still want to save their nerves, time, and money. What will work great for you will depend on how complex your issues are and how well you and your “almost” ex can work together. 

Type of belongings and loans you are dealing with

Dividing your possessions and loans is always a stressful and emotionally draining process with no doubt. There are so many questions that can drive crazy even the most stress-resistant individuals: “Who will get the vehicle?”, “Who will keep a house?”, “Who will discharge debts?” and so forth. Normally, state law can help one answer these and many other questions. The outcome of your case will depend on the type of possessions you are concerned about:

  • Separate belongings and loans belong only to one partner such as something he or she got before getting married: education loans, medical bills, gifts, lottery prizes, inheritances, etc.
  • Community belongings and loans are everything both partners borrowed, earned, and bought during their family life: a marital home, loan capital, bonds, antiques, etc. Take note that the property that was purchased with both separate and community money is usually treated as community assets.

State of your current residence

In court, belongings and loans are divided into compliance with either community property or equitable distribution scheme. Here is how your belongings and loans will be divided depending on your state:

In some states like Texas, Wisconsin, Arizona, and others, everything is either community or separate. When it comes to community assets, they are divided fifty-fifty. Separate property, including debts, is kept by his or her owner.

Other states encourage divorcing people to divide the belongings and loans, which they have obtained and borrowed together, fairly. This doesn’t necessarily mean that partners get equal shares of assets and debts, though. 

Dividing assets and debts amicably

If you and your “almost” ex are willing to work together to prepare divorce documents on your own, this will require you two to divide your assets and debts without assistance. To get started, take the following steps:

List your assets: Come up with the list of what you both own and are responsible for. It doesn’t make any sense to include any items, which you and your partner consider as personal ones and which are not supposed to be divided.

Estimate the value of everything you have, including the total amount of your debts: Assume the value of your all belongings and estimate the total amount of your loans. If you don’t feel like doing this on your own, seek help from an agreed-upon third party.

Decide on logical owners and those who will pay off loans: Look through the list and decide on every item. There must be a good reason why you or your “almost” ex can keep something and why you or your partner should discharge a particular debt. Start with the most essential items and see how far it will go.

Get approval from a judge: If you two can divide everything amicably, a judge will approve whatever decision you have made. However, if one spouse, who doesn’t have an attorney, agrees to get much less than another partner, a judge may want to revise your papers. 

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