Debt Division in Divorce Proceedings

If you have questions about divorce, legal separation, alimony entitlement, or alimony in Connecticut, please feel free to call the experienced divorce attorneys at Maya Murphy, P.C. in Westport today at 203-221-3100 or email Joseph C. Maya, Esq. at JMaya@Mayalaw.com.

Before dividing property in a divorce or legal separation case, the court must determine whether property and debts are marital or separate. For debts, any debts incurred prior to the marriage are considered Separate Debt. Any debt incurred after the date of the marriage, regardless of in whose name it was incurred or the purpose for the debt, it is classified as Marital Debt. All property is considered Marital Property, except:

1. Property owned before the marriage that is still in that person’s name alone
2. Property acquired during the marriage by gift
3. Property acquired during the marriage by inheritance

These are classified as Separate Property. The court must set aside to each person, their separate property and make them solely responsible for the payment of their separate debt. It should be noted that any appreciation or gain on the value of separate property is marital property. So, if you had a $5,000 savings account on the date of marriage and it’s worth $5,500 on the date of divorce or legal separation, the $5,000 would be your separate property and the $500 increase in value would be marital property.

How to Divide the Marital Property and Debt

In separate property states, marital property and debt is divided “equitably.” This does not necessarily mean “equally.” During this part of the process, the court looks at what is a fair and equitable division of the property and debts, given many factors. The statute lists some factors, but just about anything that you think matters, can be considered. Examples would be how long you’ve been separated, that somebody wasted assets gambling, that someone is the beneficiary of a large trust to be received in the future. The primary factors listed in the statute are:

1. How much separate property/debt does each person have;
2. What was each person’s contribution to the acquisition of the property. It should be noted that the law specifies that contribution as a homemaker is considered just as important as who made a paycheck or who made more money; and
3. The incomes of the parties. If one person will always make a lot more, then that’s a reason to give the other person more of the property at the start.

Practical Considerations

After determining what is marital and what is separate, it’s a good idea to start with the assumption that the marital property and debts will be divided equally. Then, see if there are reasons that you should get more or less than one-half. The one who earns less, even if maintenance is awarded, should really consider asking for more than one-half of the marital property, or to pay less than one-half of the marital debt. Please note that the property and debts to be divided are divided as of the date of the court hearing and NOT when you separate. What happens to debts and assets during separation can be a factor in deciding what is equitable, but amounts are not frozen in time when you separate.

For a free consultation, please do not hesitate to call the experienced family law and divorce attorneys at Maya Murphy, P.C. in Westport, CT at 203-221-3100. We may also be reached for inquiries by email at JMaya@mayalaw.com.

Source: Avvo