Going through a divorce is a challenging and emotional experience, and dealing with financial matters and debt can only make it more stressful. In Ohio, the process of dividing assets and debts acquired during a marriage can be complex. To resolve any issues related to divorce and debt in Ohio, it is crucial to understand the laws and regulations governing these matters.
Marital Property vs. Separate Property
Before delving into debt during divorce in Ohio, it is important to grasp the concept of property classification. Ohio operates under the equitable distribution system, meaning that property obtained during a marriage is subject to division upon divorce. The court determines what is fair and just when dividing marital property, but it does not necessarily entail an equal split between spouses. In Ohio, two types of property are recognized:
Marital property – This encompasses any property acquired during the marriage.
Separate property – This includes any property obtained before the marriage, after a legal separation, or as a gift or inheritance.
Divorce and Debt in Ohio
Similar to the division of property, the court also decides how marital debt should be divided during divorce proceedings. In Ohio, all debts amassed during the marriage, regardless of whether they are in one spouse’s name or joint, are considered marital debt. This encompasses credit card debt, mortgage debt, car loans, and other consumer loans.
If both spouses reach a mutual agreement on assuming responsibility for their respective debt, they can devise their own payment plan. However, if no agreement is reached, the court will determine how to fairly distribute the property and debt.
It is important to note that any agreement between spouses concerning debt payments does not absolve the obligation towards creditors. For instance, if a credit card is in both parties’ names and one spouse agrees to pay the debt, the other party can still be held accountable by the creditor if the payments are not made.
Separating Debt and Liability
Ohio courts consider several factors when dividing debts during divorce proceedings, including:
- Which spouse incurred the debt?
- Did one spouse benefit more from the debt than the other?
- Which spouse has the financial capacity to repay the debt?
- Does either spouse have pre-existing financial obligations or obligations to support dependents?
If a debt is solely in one spouse’s name, it does not absolve the other spouse from responsibility. Creditors may still hold both spouses liable for joint accounts and debts accumulated during the marriage. Consequently, it may be in your best interest to resolve your debt issues before finalizing the divorce decree.
Bankruptcy and Divorce
Declaring bankruptcy presents an alternative for addressing debt and financial matters during a divorce. While filing for bankruptcy can help discharge certain debt obligations, it can significantly impact divorce proceedings. If one spouse files for bankruptcy, the court may halt the distribution of marital property and debt until the bankruptcy case is resolved.
It is worth noting that Ohio law does not allow for the discharge of divorce-related debt obligations in bankruptcy proceedings. For instance, if one spouse is ordered to pay child support or spousal support, that obligation cannot be eliminated through bankruptcy.
Final Thoughts
Divorce and debt in Ohio can be intricate issues, necessitating a comprehensive understanding of the laws and regulations. If you are going through a divorce and have concerns about debt, it is essential to seek the assistance of a family law attorney who can guide you through your options.
By gaining an understanding of the laws governing marital debt in Ohio and exploring strategies for managing it, you can effectively minimize the stress and losses associated with divorce proceedings.