Dividing Debt During A Nebraska Divorce: What Happens To Joint Credit Cards And Loans?
Posted By: William Finocchiaro
In this article, you will discover:
- The difference between marital debt and separate debt in Nebraska.
- Who is responsible for jointly held credit card debt in a divorce.
- Whether significant debt can influence custody negotiations.
What Is The Difference Between Marital Debt And Separate Debt In A Nebraska Divorce?
In Nebraska, marital debt is defined as any debt or financial obligation incurred by either spouse during the marriage for the joint benefit of both parties, regardless of whose name is on the account. All marital debt will be subject to equitable division between the parties.
Debts incurred prior to the marriage usually remain the separate responsibility of the spouse who incurred them. Suppose a debt was incurred during the marriage, but it was personal in nature and in no way related to the joint benefit of the parties or legitimate household expenses. In that case, it may be considered a separate debt of the party who incurred it.
Extreme examples of this kind of debt include debt incurred from extramarital affairs, gambling expenses, or drugs and alcohol. It’s important to note that when there is a genuine disagreement over whether a debt is marital or separate, the burden to show that a debt is non-marital is on the party asserting it.
There’s a delicate balance over what constitutes marital debt. For instance, if your spouse purchases more hunting or fishing equipment with credit than you would have preferred, that’s still going to be a marital debt.
Reasonableness factors into the determination of what is marital debt, and everything can reach a point of excess. However, debt related to hunting gear or beauty supplies will probably be considered for the benefit of the marriage, even though they’re specifically purchased for you or your spouse. Regardless, there is a high burden to show that debt was incurred for a non-marital purpose and to have it set aside as a separate debt.
Who Is Responsible For Jointly Held Credit Card Balances During Divorce?
Jointly held credit card balances incurred during the marriage are considered marital debt and subject to equitable division between the parties. However, equitable division does not necessarily mean equal division, although assets and debts are most commonly divided 50/50.
The court can apportion marital debt based on what’s fair and equitable under the circumstances. Still, it is most likely that joint debt incurred during the marriage, regardless of whose name is on the account, will be subject to equal division.
Can One Spouse Be Liable For Secret Debts The Other Incurred In A Divorce?
You may be liable for your spouse’s debt incurred during the marriage, despite not being aware of it. It ultimately depends on why the debt was incurred. Suppose it was incurred for the joint benefit of both of you or for paying household bills and expenses. In that case, it likely will be considered marital debt, subject to division, regardless of whether you were aware of it.
On the other hand, if a debt you didn’t know about was not for the joint benefit of you and your spouse, or if it’s an expense entirely unrelated to the household, it may be considered a separate debt, despite being incurred during the marriage. Examples would include debt incurred for extramarital affairs, gambling, drugs and alcohol.
How Can A Divorce Attorney Help Me Negotiate Fair Debt Division And Prevent Disputes?
An effective attorney can assist you by identifying all debts incurred by you and your ex, analyzing their true purpose and determining whether they are marital or separate debt. If you claim a debt incurred during the marriage is not marital debt to be equitably divided, you carry the burden of proof. An experienced attorney can assist you with meeting that burden and presenting the proper evidence and testimony to the court to accomplish that end.
Another area of marital debt is student loan debt. Student loans incurred during the marriage are difficult to address. Based on the circumstances of each case, Nebraska courts have considered student loan debt to be both marital and subject to equitable division, as well as separate and the responsibility of the incurring party.
While student loan debt may have been incurred during the marriage, thereby meeting the definition of a marital debt, an argument can be made that the party receiving the education is the one benefiting far into the future, rather than both parties jointly.
How Does The Presence Of Significant Debt Influence Custody Negotiations, If At All?
While custody, parenting time, and debt are interrelated in some ways, they’re entirely different issues. As long as you and your ex have the ability to provide for your children sufficiently, significant debt should have little to no impact on the custody negotiations.
As a matter of public policy, Nebraska Courts frown on using financial negotiations to leverage custody and parenting time, which is always based on the children’s best interests. For that reason, significant debt should not have any real impact on custody issues.
Still Have Questions? Ready To Get Started?
For more information on dividing debt in a Nebraska divorce, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (402) 345-7600 today.
