Divorce brings with it many challenges, and one matter that often looms large is the responsibility for shared debts. In New Jersey, the division of marital debt is a complex process that hinges on various factors.
Understanding who bears the responsibility for debts incurred during the marriage is important as couples navigate the intricate terrain of divorce and financial separation.
Equitable distribution
New Jersey follows the principle of equitable distribution when it comes to dividing assets and debts. Equitable does not always mean equal. Instead, it implies a fair and just division based on various considerations. When scrutinizing debts, the court assesses factors such as the duration of the marriage, each party’s financial contributions and the overall economic circumstances. This nuanced approach seeks to balance the scales, ensuring a just distribution of marital debts.
Joint debts
Married couples often accumulate joint debts. Some such debts might include mortgages, loans and credit card balances, with Bankrate noting that the average credit card debt in 2022 was $5,910. In a New Jersey divorce, these joint obligations become part of the equitable distribution process. The court aims to allocate debts in a manner that reflects the financial circumstances and contributions of each spouse. While joint debts typically undergo division, the court may consider factors like who benefitted from the debt and who can handle the financial responsibility.
Separate debts
Not all debts incurred during a marriage are joint. Separate debts, such as those acquired by one spouse, also come into play. New Jersey courts distinguish between marital and non-marital debts, and the responsibility for separate debts often rests with the spouse who incurred them. However, exceptions may arise.
As couples navigate the financial waters of divorce, understanding the principles that guide debt division helps them achieve a fair and just resolution.