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How debt is divided in a divorce

Getting divorced involves various complications and difficulties including the distribution of assets. Have you thought about your marital debts? Debt is treated as an asset in a divorce. If you do not know what debt you will be responsible for after the divorce, it is time to learn the basics about dividing debt.

Fair division

First of all, it is important to know that New Jersey law treats marital debt with equitable distribution during a divorce. This means that all marital property is divided between both spouses in a fair manner. The court determines what is equitable based on a variety of factors, meaning that the distribution may not be exactly equal.

Factors considered

Equitable distribution is different than community property laws in other states that require each couple to split half of their property. This means the outcome is more flexible, but it can be a little complicated to figure out. Here are some factors that play a role in deciding what type of distribution is fair:

  • The duration of your marriage
  • The health and age of both spouses
  • Any property and income each spouse brought into the marriage
  • A written property agreement
  • The earning potential of both spouses
  • Tax consequences


Most courts try to balance assets and debts when deciding on the division of property. For example, if someone is given more assets, he or she may be given more debt to make the outcome equitable.

Understanding marital property

The court will need to know what debts fall under marital or separate property. If you or your spouse had debt prior to the marriage, it will generally be counted as separate property and not given to your spouse in an equitable portion. If you had a joint business with your spouse that accumulated debt, the person who gets the business will be responsible for the business debt.

Considering bankruptcy

Unfortunately, bankruptcy is sometimes a serious consideration for divorcing couples. It may be a factor in getting divorced, or it may be a way to deal with the debts distributed by the divorce. If one or both of you cannot pay assigned debt, filing for bankruptcy may be the only viable option.

Dividing your assets can be even more complicated if it is a particularly bitter issue or if there is highly valuable property involved. Whether you are in the process of getting divorced or simply considering it, consulting with a divorce attorney will help you understand your rights.

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