Board Certified Family Law Specialist Matt Arnold answers the question: “How will the judge divide our property?”
Family courts in North Carolina have a duty to categorize assets and debts and determine their value to distribute these assets and debts in a fair and equitable manner. The process is referred to as Equitable Distribution.
A divorcing couple might dispute the value of their marital home, retirement accounts, and the appointment of debt. No one wants to be solely responsible for debts incurred during the marriage. These debts can include bank loans, mortgages, and student or school loans.
Consult a Charlotte family law attorney if you have questions about how your marital debt will be split. Our divorce lawyers at Arnold & Smith, PLLC, will address your concerns and ensure that your marital debt is divided equitably.
How do North Carolina Courts Split Up Marital and Separate Debt?
The division of marital debt is one of the financial considerations you have to look into when getting a divorce in North Carolina. In Charlotte and elsewhere in North Carolina, courts recognize two types of debt:
- Separate (individual)
Family law courts in North Carolina have the following requirements for establishing what is marital and separate debt after a divorce or separation:
- The spouse alleging that the debt is “marital” bears the burden of proof
- That spouse must also prove the amount of the marital debt as of the date of legal separation or divorce
- There must be proof that the debt was undertaken for the joint benefit of both spouses
How Does Equitable Distribution of Marital Debt Work in North Carolina?
The “equitable distribution” standard applies to both the assets and debts of the parties. State laws require a three-step process when it comes to distributing marital property, assets, and debts equitably:
During the “classification” step, the court determines who owns what. In other words, the court must establish what marital assets and debts are and what separate assets and debts are. A separate asset or debt is any asset owned or debt undertaken by each party before the marriage.
Marital debt is any debt that was incurred during the marriage and before the date of legal separation. North Carolina courts recognize marital debt as such only it was for the “joint benefit” of both parties.
Are Student Loans Marital Debt in North Carolina?
Student or school loans can qualify as marital debt. However, when it comes to the appointment of loans incurred for education during the marriage, the court will consider whether both parties shared in the reward of a degree or education.
In fact, a student loan can be considered marital debt, even if the funds were not specifically used for education. If a student loan was used to pay bills, buy groceries, or cover the expenses associated with the maintenance of the household, it might still be considered marital debt as long as it was used to the benefit of the marriage overall.
Talk to a Charlotte family law attorney from Arnold & Smith, PLLC, to determine how debts and assets should be divided in your particular case. Call at 704-370-2828 to evaluate your situation. If you find yourself facing a complicated family law matter and need the help of experienced family-law attorneys, speak with our detail-oriented and well-versed lawyers in or around Charlotte, Lake Norman, or at our new office in Monroe, please contact Arnold & Smith, PLLC today at (704) 370-2828 or find additional resources here.
The family law practice group at Arnold & Smith, PLLC includes two Board-Certified Family Law specialists and one Child Welfare Law specialist, as well as several attorneys with many years of family law experience that are committed to providing a powerful voice to individuals facing the often-tumultuous issues in this area of law. The range of issues our family law clients may be facing include pre- and post-nuptial agreements; separation agreements; post-separation support; child support (both temporary and permanent); absolute divorce; divorce from bed and board; military divorce; equitable distribution of assets; child custody (both temporary and permanent); retirement benefits and divorce; alimony and spousal support; adoption; and emancipation. Because this area of the law is usually emotionally charged and complicated, the family law attorneys at Arnold & Smith, PLLC act with the utmost dedication to ensure that each client understands his or her options, and then act to achieve the best result possible for that client’s particular situation.
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