Ken and Kora are going through a divorce in Massachusetts. They were married for a short time. During the marriage, Ken racked up substantial credit card debt. Ken and Kora both work full-time, but Kora makes significantly less money than Ken. She worries about the Court dividing the marital property. Will it burden her with parts of Ken’s debt?
This is a possible scenario. The couple typically incurs debts during marriage, which are considered marital liabilities. The Court factors them into decisions about property division. The Massachusetts Probate and Family Courts use a process called equitable distribution to divide marital property in general. Here, the term “equitable” means “fair,” and not necessarily equal: the court will determine how best to divide marital property in the fairest manner in each particular case. There are many factors that the Court considers as part of this process.
The court also considers the parties’ liabilities, in addition to their assets. As some examples, the courts have considered tax liabilities, student loans, and bank loans owed by one or both parties. The courts examine debts to determine both responsibility for payment and their impact on the equitable division of proceeds. They also assess how debts may affect the granting of alimony. For instance, the courts may find that, although both parties have their own debts, because one party makes significantly more than the other, it would be unfair to burden the other party with some or all of the liabilities incurred during the marriage.
The Court will take into consideration many factors and questions in regards to the parties’ debts and liabilities. For example:
- Did one or both parties accumulate the debt? Did either party object to the prospect of accumulating this debt?
- Did the debt occur before or after the marriage? Was it incurred after separation or during the contemplation of divorce?
- Did both spouses incur the debt, or did only one of them? Did the debt benefit the family?
Of course, in cases where one party profligates and incurs debt (particularly debts which were the result of significant unreasonable spending or mismanagement of finances), the Court may order that party to settle his or her own debts, rather than assigning the debt to both parties as part of the marital assignment. For example, in one case, the Court noted that the couple’s debt was largely due to the husband’s financial mismanagement and living beyond his means. The Court held that a fifty-fifty split of liabilities and assets was not necessary. [1]
If you have any questions about division of marital property, you may schedule a free consultation with our office. Call 978-225-9030 during regular business hours or complete a contact form here, and we will get back to you at our earliest opportunity.
[1] Duckett v. Duckett, 27 Mass. App. Ct. 1164 (1989).