Marital debt is a big issue in Michigan and it is rarely talked about during divorces. When you think of divorces the idea of dividing property and other assets comes into mind. You need to remember that while you are dividing property, accounts, and investments there is still the element of marital debt that is involved. Today we will be taking a look at what happens to marital debt during a Michigan divorce and how it impacts you.
Marital Debt In A Divorce
The courts handle debt similarly to other assets and property. If everything goes perfectly and no other issues arise, marital debt in a Michigan divorce will be split 50/50 between the two parties. It doesn’t matter whose name the debt is in, in most cases that debt will be divided between both spouses. There are many options of paying off debt and splitting these things, talking to the other party and your lawyer can help you out by creating a plan that will work for everyone involved. At the end of the day, debt has to be handled like assets, and you have to retire the debt equally and equitably just like anything else.
In the real world of divorce, it is extremely unlikely that someone will receive 100% of the marital assets and that the other person will walk away with zero assets. Despite the fact that MI is a no-fault divorce state, the truth is that fault can be relevant to some property, alimony, and other issues. The court may not be equal about it, it may be something along the lines of a 60-40 split, but you don’t see 90-10 split in these scenarios from Michigan courts. Lawyers who have experience will know about the rules of the splitting of marital assets and will tell you that you will get an equitable distribution that is fair.
Financial Mistakes To Avoid
Sometimes people have certain instincts and think they have to take care of things a certain way without thinking it through. One of the financial mistakes that individuals make is paying off debt before the divorce hoping the court will look at them differently. Marital debt is going to have to be divided in the divorce balance sheet just like a marital asset. This means when you run to pay off the debt, it will not come back into the equation as a shared debt. The debt may be something that your soon to be ex has to pay half of also.
Another mistake from a financial standpoint as attempting to hide assets. Most assets can be traceable to some degree and if one person is caught trying to deceive the court, there are very serious consequences of doing so. The court will find out if you have made an attempt to hide any of your assets and there will be consequences.
Conclusion
Remember to list off all your assets and marital debts before your divorce. This will help you in the long run, the court will look at everything that you own and will divide it equally. Division of property in a divorce is not a taxable event. Even though you are receiving money and property, this does not count as income for tax purposes. Similarly, anything you pay to your former spouse is not tax deductible.
If you need more information on High Asset Divorce or Marital Property or if you have any questions regarding divorce in The State of Michigan contact Goldman and Associates Law Firm. At Goldman and Associates, our attorneys are experts in family law and they will thoroughly examine all aspects of your divorce. With the best lawyers in Michigan, Goldman and Associates takes each and every case very seriously and gives you the outcome you desire.
For more information on high asset divorce in the State of Michigan watch the video below and check out the Goldman and Associates YouTube channel for more videos on everything relating to law in Michigan. Make sure to give our attorneys a call if you have any questions about domestic violence in Michigan.
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