Divorce is never an easy process to go through, especially when it comes to finances. One aspect that can be particularly challenging is dividing the debt between the spouses. Indiana follows the principle of equitable distribution, meaning that the judge will distribute assets and liabilities (debts) in a fair and just manner. However, this does not mean that everything will be split 50/50.
Marital Versus Non-Marital Debt
Before diving into the specifics of asset division, it is essential to distinguish between marital and non-marital debt. Marital debt generally includes any debt incurred during the marriage, with few exceptions, such as intentional dissipation or fraudulent spousal behavior. Non-marital debt, on the other hand, includes debts that either spouse had before the marriage or acquired after separation.
Factors Considered When Dividing Debt
Indiana courts look at many factors when dividing debt between spouses.
Income
First, courts will consider each spouse’s income. The higher-earning spouse may be given more debt to pay off because they have greater financial resources.
Contribution to the Debt
Another significant factor in dividing the debt is how much each spouse has contributed to the debt. This may involve looking at who made the purchases that led to the debt and who benefited from those purchases.
Property Division
Debt division is often intertwined with the division of marital property. For example, if one spouse is awarded valuable assets in the property division, they may be required to take on more debt to balance out the settlement.
Child Custody and Support
If the couple has children, courts may consider child custody and support arrangements when dividing debts. For example, if one spouse is awarded primary physical custody of the children, they may also be awarded more debt to support the children’s needs.
Reasoning Behind Debt Incurrence
Courts may also consider the purpose behind the debt. For example, if one spouse incurred debt to pay for their education, the court may be more likely to allocate that debt to the spouse who directly benefited from the education.
Not All Debt Is Divided Equally
Keep in mind that equitable distribution does not always mean equal distribution. In Indiana, courts strive to divide debt and assets in a way that is fair and just to both parties. This process does not necessarily involve breaking everything down 50/50, but rather, taking into account the unique circumstances of each case to come up with a solution that works for both parties.
Seek Legal Advice
If you are going through a divorce in Indiana and have concerns about debt division, it is essential to seek legal advice from an experienced divorce attorney. They can help you navigate the complexities of the legal system and ensure that your interests are protected throughout the divorce process.