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Don't forget about debt during a divorce

When most couples in New Orleans think about divorce, their minds run through the child custody issues and alimony decisions, probably with some worry. But when it comes to property division, they may think that certain items are theirs while others are not -- they may think they've got it all figured out already. The problem is that a lot of individuals neglect the fact that they have brought debt into the marriage that has yet to be addressed. This debt, whether it was incurred before or after the marriage, must be addressed by both parties if both spouses have contributed to it.

This is when the property division process can get messy. One spouse may claim that the other has contributed more to the debt than she or he has. This may translate into a desire for more of the other's share of the division of assets to be used to pay down the debt. This can result in a very bitter back-and-forth. But if both parties contributed to it equally and are willing to address it together, things may go much easier. Of course, this means coming to an agreement on what community assets should be used to pay down the debts. This may mean the sale of an extra vehicle, a vacation home or any sort of valuable assets.

Experts suggest that during the divorce proceedings, spouses address the debt issues as best they can so neither has to carry debt into this new chapter of their lives. To make sure that this debt does not get out of control, be sure to have any joint credit accounts frozen so that neither of you can add to the debt as one of you files for divorce. Some spouses will do this to lash out at the individual who filed for the dissolution while others may spend as a coping mechanism. Either way, both parties will be responsible for any spending at this point on a joint account. This is why it is wise to have the account frozen so that the debt can be addressed as best as possible and then distributed during the property division process. If you are involved in a divorce and are uncertain of what to do, speak with a lawyer who specializes in such matters.

Source:  Fox Business, "Divorce and Card Debt in Community Property States" Sally Herigstad, Jul. 17, 2013

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