Divorce can have a drastic impact on each ex-spouse’s financial situation. Between court fees, household income fluctuations and asset division, it is likely that you will experience changes in your finances.
Assets often take center stage in discussions of divisible property, but debts are also relevant to these conversations.
Equitable distribution
Kentucky is an equitable distribution state. This means that the division of marital assets will not be simply split half and half. There are other factors considered when determining how to divide assets and debts. Just because the debt in question is in your spouse’s name does not mean you hold no responsibility for repayment. Debt incurred during the marriage and with a shared benefit and marital purpose may fall to both you and your divorcing spouse
Deciding factors
Courts will take numerous factors into consideration before making a final decision on equitable distribution of debts. This division of costs can have a substantial impact on each spouse’s financial situation. Debt is commonly divided based on:
- The liability of each spouse
- When and how you incurred the debt
- The financial circumstances of each spouse
Things like mortgages and credit cards are often considered marital debt. However, ownership of the asset in question will also be relevant in most cases. If, for example, a loan for a new vehicle is in both your and your spouse’s names, but you retain the vehicle in the divorce, the responsibility for that debt may lie solely with you.
How your marital debts get divided will largely depend on your individual circumstances.