Debt And Divorce: What To Know About Florida Law

Debt is an issue for many families in Florida. The Federal Reserve Bank of New York reports that the average American household holds around $100,000 in debt. If you get divorced, you and your spouse will need to handle all of your financial matters. Debt division is a part of property division in a divorce. Here, our Tampa divorce attorney provides a comprehensive overview of the most important things that you should understand about debt and divorce in Florida.

Debt is an Issue in Many Marriages (and Divorces) in Florida 

If you have questions about debt, you are certainly not alone. Debt plays a big role in many marriages and, as a consequence, in many divorces. In fact, financial strain is one of the leading causes of marital disputes. Couples in Florida accumulate various types of debt throughout their marriage, including:

• Credit card debt:
• Personal loans;
• Mortgages;
• Auto loans;
• Student loans;
• Business debts; and
• Tax liability.

Florida is an Equitable Distribution State—including for Debt

Florida is an equitable distribution state. Under Florida Statutes § 61.075, a divorcing couple’s marital property will be divided in an “equitable” manner. In this context, equitable means “fair”—it could be, but does not have to be, a 50/50 distribution. Notably, marital debt is always subject to equitable distribution in a divorce in Florida. To apply the standard, the court can consider several different factors, including:

• The financial circumstances of each spouse;
• The duration of the marriage; and
• Each spouse’s contribution to acquiring the debt.

It is important to clarify that marital debt generally includes obligations incurred during the marriage—regardless of which spouse’s name is on the account. However, debts that were taken on before the marriage or those deemed separate—such as an individual’s personal credit card debt used for non-marital purposes—may remain the sole responsibility of the spouse who incurred it.

The Right Division is Debt in a Divorce is Highly Case Specific 

How exactly should you and your spouse divide your debt in your divorce? The short answer is that there is no one-size-fits-all solution. Indeed, there is no universal formula for dividing debt in a Florida divorce. The right approach depends on the unique financial circumstances of each couple. Some key factors include the nature of the debt, the ability of each spouse to repay, and whether the debt was accrued for a marital or personal purpose. For example, if one spouse accumulated significant credit card debt through reckless spending, the court may assign a greater portion of that debt to the responsible party. Alternatively, if the debt was used for joint household expenses or investments benefiting both spouses, it may be split more evenly. 

Contact Our Tampa Divorce Lawyer Today

At Faulkner Law Group, PLLC, our Tampa divorce attorney is committed to helping clients find the best solution. If debt and divorce is an issue in your case, we are here as a resource that you can trust. Contact us today for a fully confidential, no obligation initial consultation. With an office in Tampa, we provide family and divorce representation throughout the region in Florida.

Source:

newyorkfed.org/microeconomics/hhdc