Dividing debts during a divorce in Tennessee can be as challenging as dividing assets. Tennessee follows equitable distribution rules, which means the court divides both assets and debts as fairly as possible.
However, this does not necessarily mean that assets and debts will split equally. Understanding how the court approaches marital debts can help you prepare for this process.
Identifying marital debts
The first step in dividing debts involves identifying which debts are marital and which are separate. Marital debts are those taken on during the marriage, regardless of who made the purchases or signed the agreements. These can include mortgages, credit card balances, car loans or personal loans.
Separate debts, on the other hand, are debts one spouse acquired before the marriage or after the separation. The court generally assigns separate debts to the person who incurred them.
Dividing debts fairly
When dividing marital debts, the court considers various factors to ensure fairness. Judges look at each spouse’s income, earning potential and ability to repay the debts. They may also examine how the debts came to be. For example, if one spouse used a credit card to cover personal expenses without the other spouse’s consent, the court may assign that debt solely to the responsible party.
Navigating shared assets
Shared assets can complicate debt division. For instance, if a couple jointly owns a home with a mortgage, the court must decide who will keep the home and who will remain responsible for the mortgage. Selling the home and splitting the proceeds can provide a simpler resolution, but this is not always reasonable or desirable.
Simplifying the debt division process
Open communication and accurate financial records can make debt division more straightforward. Gather documentation such as bank statements and loan agreements to help ensure that you account for all debts. By doing your part to comply with court procedures and collaborate with your spouse, you can get through the property division process with minimal frustration.
Tennessee’s approach to marital debt helps ensure that both sides walk away with a fair share of asses and responsibilities. With this in mind, you can efficiently work toward a fair resolution for your divorce.