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The Division of Debts in a NJ Divorce

Everyone going through a divorce worries about how the family debt will be divided. Married couples accumulate many assets, such as houses, cars, and retirement plans. They also accumulate debts, including home mortgages and credit card debt. When a couple divorces, both assets and debts must be divided. This blog will focus on the division of debts in an NJ divorce.

The Basics of the Division of Debts in an NJ Divorce

NJ handles the division of both debts and assets in a process known as “equitable distribution.” In equitable distribution, the judge presiding over a divorce case makes a fair and equitable distribution of both assets and debts. It is important to note that “equitable” does not mean “equal.” Although the judge will take steps to distribute assets and debts in a way that is fair and comparable, the specific values may not be identical.

Criteria Considered by the Court in Division of Debts in an NJ Divorce

It might surprise you to learn that NJ courts consider 15 specific factors when deciding how to Image of a calculator, to represent the division of debts in an NJ divorcedistribute the debt and assets of a NJ married couple. Here is a list of the equitable distribution factors in NJ:

  • The length of the marriage or civil union
  • The parties’ age and health
  • Any income or property brought into the marriage by the individuals
  • The parties’ standard of living
  • Written agreements, such as premarital agreements, made either before or during the marriage
  • The parties’ economic circumstances after the division of property occurs
  • The parties’ income and earning capacity
  • Any contributions made by one spouse to the other’s ability to earn income
  • Any contributions made that increased or decreased the value of the couple’s marital property
  • The tax consequences of the proposed property distribution
  • The present value of the property
  • The need of a custodial parent to use the marital home
  • The parties’ debts and liabilities
  • The need for a trust fund to pay for medical or educational costs of a spouse or child
  • Any delay incurred by one party in achieving his or her career goals

In addition, NJ law contains a 16th, catch-all factor: “Any other factors which the court may deem relevant.”

All of these factors must be considered by NJ judges when they make divisions of either assets or debts.

Is the Assignment of Debt Considered When NJ Courts Decide Other Important Matters in a Divorce Case?

Yes! NJ divorce laws specifically provide for specific factors to be considered when courts make certain decisions in family law cases.

For example, NJ law provides that when making a determination about child support, one factor to be considered is the “[r]easonable debts and liabilities of each parent.”

Similarly, NJ alimony law requires courts to take into consideration the “equitable distribution of property order and any payouts” on that distribution. In addition, NJ law allows courts to make adjustments to the length of time alimony must be paid. One of the factors that may constitute an “exceptional circumstance,” thereby allowing a different duration of alimony, is “[w]hether a spouse or partner has received a disproportionate share of equitable distribution.”

As you can see, the division of debts in an NJ divorce is not a simple determination. Instead, this area of law is governed by many factors, any of which may impact how a couple’s debt is divided. A skilled NJ divorce lawyer is best equipped to locate all the evidence on the relevant factors and to present it in the most favorable light to the court.

If you need advice about the division of debts in an NJ divorce, contact me, Elizabeth Rozin-Golinder, by filling out my Contact Form or calling (732) 810-0034. I've dedicated my career to practicing family law right here in New Jersey, and I would be honored to help you obtain the most favorable distribution possible.

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