Dividing Debts In Divorce, Florida Family Law
Who has to pay back debts after divorce? This can be a contentious question.
It is not uncommon for people to incur debt together during a marriage. Common debts, or “liabilities,” that must be divided during the dissolution of marriage include:
- Mortgages
- Car loans
- Credit card debts
- Other amounts of money owed to third parties
Florida law provides for an “equitable distribution” of marital assets and debts. Equitable distribution refers to the division between spouses of tangible and intangible property, real property, assets and debts, and usually occurs in conjunction with the Dissolution of Marriage action. Equitable is not necessarily synonymous with equal in all cases.
To learn about division of assets, read our article Dividing Assets In Divorce, Florida Family Law.
Marital, Nonmarital, or Premarital Debt
There are two types of assets and debts in Florida: marital and nonmarital. There is a third type of debt in Florida: premarital debt.
Generally, any debt incurred during the marriage is considered marital debt. Debts determined to be marital debt will be divided during dissolution of the marriage.
In some instances, parties may have nonmarital debts, which are debts incurred during the marriage, but are held only in one spouse’s name and are not paid with marital funds. Nonmarital debts are not subject to distribution.
Premarital debts are debts incurred by one spouse prior to the marriage. As with nonmarital debts, premarital debts are not subject to distribution. Payment for nonmarital and premarital debts are the sole responsibility of the party who owns the debt.
Equitable Distribution of Debt
The court must begin with the presumption that all marital debts are to be divided equally between the parties; however, the court may distribute the marital debts fairly and equitably – which may not necessarily be equally, with a 50/50 split, between the two parties.
The court decides equitable distribution based on a number of factors. These factors include the length of the marriage, each spouse’s overall economic circumstances, each spouse’s contributions to the marriage, their nonmarital assets and debts, and whether either spouse intentionally wasted or destroyed marital assets either after the divorce petition was filed or within the two-years preceding it.
As long as the court finds it reasonable, it will typically approve the division of assets and debts agreed to by both parties. If no agreement is reached, the court will divide the assets and debts during trial.
The Florida Bar published a Divorce in Florida Pamphlet that offers an overview of the dissolution of marriage process and information on the equitable division of assets and debts. You can view the pamphlet here. At Draper Law Office we handle dissolution of marriage cases involving complex division of assets and debts. To learn more about your legal rights involving dividing debts in divorce and equitable distribution, contact us or call 866-767-4711 to schedule a consultation.
