When going through a divorce, people tend to focus on asset division. However, it’s equally important to consider how to handle debts.
Understanding how debt division works can help a couple prepare for this aspect of the divorce process and work towards a fair outcome.
Does Ohio divide marital debt?
In Ohio, the assets and debts a couple acquires during the marriage typically become marital property and are subject to division. State law follows the principle of equitable distribution for both.
This arrangement doesn’t necessarily mean a 50/50 split. Instead, it’s a division that reflects fairness according to the circumstances of the marriage. In deciding how to divide debts, the court considers:
- The length of the marriage
- Each spouse’s income and earning potential
- Who incurred the debt and for what purpose
- Whether both spouses benefited from the debt
- Each spouse’s financial situation after the divorce
Most kinds of debts are subject to division during an Ohio divorce, including mortgages, auto loans, credit card balances, personal loans, medical bills, and tax liabilities. However, there are exceptions.
How does the court decide whether to divide a debt?
The court generally views debts that either party incurred before the marriage as separate property. These remain the responsibility of the person who incurred them and are not subject to division.
However, many circumstances exist where separate debts become marital property. For example, if the non-debtor spouse adds their name to the account or loan after marriage, it usually transforms into a joint marital debt. Also, if the couple uses marital funds to make payments on a pre-existing debt, a portion of that debt could become marital property.
Certain cases exist where marital debt becomes separate. This is rare and typically applies when one spouse has engaged in fraudulent financial conduct.
Debt division can become a thorny issue even in amicable divorces. By understanding how the process works and addressing it promptly, a couple can streamline things and work towards a fair resolution for both parties.
