In a high-asset divorce, much of the focus is on property division. This is understandable given the considerable wealth that is in play and the long-term financial implications that such division can have. Yet, even high-net-worth individuals can have a significant amount of debt, and figuring out how that debt will be divided can be an extraordinarily contentious endeavor.
How debt is divided in divorce
Since Pennsylvania is an equitable distribution state, your debt, just like your assets, will be divided in a fair, although not necessarily equal, fashion. This leaves a lot of room for argument and the opportunity to escape some of the most oppressive debt coming out of your relationship.
What goes into a consideration of how debt is divided? Here are just some of the factors that a court will take into account:
- Which spouse incurred the debt
- Whether the debt benefited both spouses
- When the debt was incurred
- The contributions of each spouse during the marriage
- Each spouse’s financial positioning and therefore each individual’s ability to pay debt
- How marital assets are divided
- The nature of the debt
Remember, only marital debts are going to be subjected to division. So, if you can find a way to carve debt out of the marital estate, such as by arguing that it pre-existed the marriage or that you didn’t benefit from it at all, then you may be in a better position to avoid that debt.
Develop the sound legal strategy that you need on your side
There’s certainly a lot at stake in your high-asset divorce. That’s why you need to enter the process with a fully developed legal strategy that not only advocates for your position but also anticipates and counters your spouse’s arguments. If you’d like assistance in building your legal arguments, then now may be the time to reach out to an attorney of your choosing to discuss the matter further.