How Debt is Divided During a Divorce in MN
When going through a divorce, sorting out finances and debts may be at the top of your list. Maybe you’re wondering if you’re going to be stuck with debt that you and your spouse accumulated together.
In Minnesota, debt is divided the same way property is divided — through equitable distribution.
What is Equitable Distribution?
Dividing property doesn’t always mean there will be an equal 50/50 split down the middle. Equitable distribution means the court will divide your property, including debt, based on what is fair to both parties.
Once you’ve decided you want to divide your debts with your spouse, you should create a record of all of the money you owe together. This can give your attorney the opportunity to help you categorize the debt as separate or marital property under equitable distribution.
What is Separate and Marital Property?
Separate property is property (debt in this case) that you inherited, was given to you, or something purchased with your own money from a separate account from your spouse.
Marital property is a property or debt you accumulated during the marriage, purchased with money from a joint account, or given to both you and your spouse.
What About Debt?
Paying down debt is important, especially if it’s a debt you and your spouse had together. The good news is that courts can help you decide whether debts are separate or marital property.
Before taking the discussion of debt to the court, it would be best to speak with an attorney and answer a few questions first, such as:
Did you and your spouse know about the debt?
Who is responsible for the debt?
Did you incur debt for the benefit of your family/household?
Did you and your spouse agree to take on the debt?
What is your source of income and how much do you and your spouse earn?
Our attorneys at Mack & Santana Law Offices, P.C. can better prepare you for discussing debt during your divorce. We have experience with the court system and understand how equitable distribution and dividing debt can apply to different situations.
Reach out to our team today at (612) 712-3890 for a consultation to answer any questions you may have regarding your divorce.