What people are most concerned about the divorce process is how assets will be divided after calculating its net worth. However, many seem to forget that debts are also accrued during the marriage as well, and are also factored into the assets’ net worth. One cannot get an accurate idea of their wealth without considering the debt as well. Referencing bank and other financial statements are the best way to get a close-to-accurate estimation.
A judge will divide both the spouse’s assets and debts in the divorce judgment. In this judgment, it will be made clear which party will be paying for certain portions of the bills and debt, while the property and other assets will be simultaneously divided.
The goal of the court is to divide all of these evenly and equally, with different circumstances potentially influencing this. For instance, if a spouse was to receive more property than the other, it is entirely feasible that they will also be assigned more of the debt, but this is not always the case.
State laws impact how debts and assets are divided, and so these laws must be taken into consideration as well. Some states do consider separate property when dividing, as each party might have an independent interest in the estates that the other party is entitled to. These are usually assets or debts that are brought into the marriage.
Some states have community property rules, wherein everything in the marriage is owned equally, although a prenuptial agreement is considered in any and all settlements.
Ideally, you want to avoid debt altogether, and divorce proceedings don’t get any easier when there are massive amounts of debt involved. It becomes very complicated to start your new life when you are still connected to your old one via hovering debts. Try to clear the debt before or during the divorce, as it is one less thing to worry about during your divorce.