Divorce Settlement MistakesJacksonville divorces are based on Florida divorce law, and it is state law that determines the division of assets incident to a divorce. Most people realize that Florida applies the “equitable distribution” principle to the division of assets whereby marital assets are divided equally unless there is a good reason to favor one spouse. Do marital debts work the same way?

Separate Debts vs. Marital Debts

Any debts that either spouse incurred prior to the marriage are presumed to be the separate debts of the spouse who incurred them. Any debts by either spouse that arose during the marriage, on the other hand, are considered joint marital debts that the spouses are collectively responsible to pay. In a divorce, the court may split the debt and order each spouse to pay half.

Unusual circumstances may come into play that would make it unjust to require one spouse to pay half. Suppose, for example, that one spouse amassed huge gambling debts without the knowledge of the other spouse, or one spouse incurred debt to purchase expensive gifts for an adulterous lover. In these examples, the court may order the offending spouse to pay the entire debt.

Debts on Property Owned Prior to the Marriage

Suppose one spouse owned real estate prior to the marriage. The general presumption under Florida law would be that the real estate is the individual property of the spouse that owned it, not joint marital property. What if the real estate incurs debt after the marriage and the couple then seeks a divorce? Is the other spouse jointly liable for the debt?

In this case, liability depends on whether the other spouse managed the property or was involved in dominion or control over it. If so, joint liability probably applies. If not, the owner/spouse will be solely liable for the debt. The burden lies with the non-owning spouse to prove that he or she was never involved with the property.

Credit Card Debts

Credit card debt is generally considered joint debt. Of course, if one spouse enjoyed disproportionate benefit from a credit card, the court has the discretion to deviate from the principle of equal division and order one spouse to pay more than half of the debt. The following types of credit card debt are typically considered individual rather than joint debts:

  • Credit card debts incurred by one spouse prior to the marriage that remain unpaid at the time of divorce.
  • Debts that arose from a credit card issued in the name of one spouse. This is if the credit card was used for that spouse’s personal consumption and was not used to contribute to the marriage.
  • Debts that arose from business credit lines extended to one spouse for the operation of a business that the other spouse was not involved in. Again, if the card was not used to contribute to the marriage.

It is best to close all joint credit card accounts as soon as a divorce is anticipated so that one spouse cannot incur additional debts that the other spouse may end up liable for.

Tort Obligations

A tort obligation is an obligation that a spouse might have incurred in, say, a personal injury lawsuit. Your spouse might have signed a settlement agreement to pay compensation for an injury accident that was your spouse’s fault. Alternatively, a lawsuit judgment may have been issued ordering your spouse to pay such compensation.

If the obligation arose during the marriage, it is presumed to be a joint debt for which both spouses are liable. The court, of course, might order the offending spouse to pay the entire debt or the greater part of it, but this is not guaranteed.

The Problem of Ultimate Liability

If you are legally liable for a joint debt with your spouse, the court might order order your spouse to pay all of it if justice so demands. The problem is that if your spouse fails to pay the debt for whatever reason (whether unwillingness or simple inability), you are still liable for the debt in the sense that you can be sued for it and your credit record can be harmed.

One way of mitigating this liability is for the court to include an indemnification or “hold harmless” clause in the final judgement. All this really gives you, however, is the right to sue your ex-spouse for any overpayments that you made to cover his or her underpayment. If your spouse is unable to pay the lawsuit judgment, you have very little recourse.

Can’t We Just Remove One Spouse’s Name from a Joint Debt?

Unfortunately, you can’t, even if the divorce court ordered one spouse to pay the entire debt.

  • Neither spouse can unilaterally remove either their name or the other spouse’s  name from the agreement that created the debt.
  • The spouses cannot agree that one spouse’s name will be removed from the debt.
  • The divorce court cannot order one spouse’s name to be removed from the debt.

The reason for this inflexibility is that a third party’s rights are involved – the creditor’s. Neither spouse has the legal right to extinguish the debt on his or her own behalf or on behalf of the other spouse. Likewise, the divorce court has no jurisdiction over the creditor, and it lacks the authority to issue an order that would affect the rights of the creditor.

Get a Head Start – Contact Our Experienced Divorce Attorneys Today

The division of marital debts could turn out to be exceedingly complex depending on the complexity of your finances. If your debts are high, it is particularly important that you get a head start dealing with these issues. A lot depends on subtle legal nuances and the quality of evidence that you are able to produce. In court, almost nothing is true unless you can prove it.

If you live in Jacksonville, Florida and you are either involved in a divorce proceeding or are anticipating one, contact Beller & Bustamante either online or by calling (904) 288-4414 to schedule a no-obligation consultation. Our experienced divorce lawyers can answer your questions and help you explore your options.