Equitable Distribution Lawyers in Charlotte, North Carolina :: What Happens to Small Business Debt in Divorce?

Divorce Attorneys in Charlotte, North Carolina.jpgIf a spouse mixes business with personal life, for instance, by using a personal credit card for business matters, the result will likely be no different than what would happen if it were a personal credit card in a divorce. Despite the fact that the card is tied to business and relate to only one spouse, both spouses may still end up responsible for the payments.

If the debts occurred in order to help a business which created an income for the spouse, they will likely be considered a “marital obligation.” If a judge finds the debt and its amount to be reasonable and if there are no other business assets to offset the amount of the debt, it could very well end up being shared as part of the equitable division process that takes place in every North Carolina divorce.

This same logic applies even if the card is only in the name of one spouse. The issue is not whose name the debts are held, but whether or not the debts were legitimately acquired during the marriage. If they were, they can be split equitably. While many people appreciate that this applies to assets, the downside is that the same rule applies to debts. If your spouse has a lot of assets it will work out well, as those will need to be divided. Unfortunately, if your spouse has a lot of debt, that too may have to be split.

If you find yourself facing the prospect of divorce in Charlotte, contact the experienced equitable distribution lawyers in Charlotte, North Carolina at Arnold & Smith, PLLC who can help guide you through the sometimes-confusing process.

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