The New Jersey Law Journal notes couples will often fight over property that is of little monetary value, including items of sentimental value like pictures. Credit card points, frequent flyer miles and even items like dishes and towels have become issues, particularly when acrimony rules over reason during property settlement negotiations.
Our Monmouth divorce lawyers have written frequently about the cost of divorce. Avoiding pointless squabbles will often reduce your legal fees and allow your divorce attorney to focus on the critical factors in negotiating a fair and equitable property division.
A recent New Jersey appellate decision in Flockhart v. Flockart reviewed property division as it relates to liabilities, in this case negative equity in a timeshare. Because the mortgage on the timeshare exceeded the value of the property, the judge could not order a sale and instead had to award ownership of the timeshare to one party of the divorce.
Equitable Distribution of Liabilities
The case brings up a critical but often overlooked point: Division of property can be as much about who assumes the liability for things like mortgages, car loans and credit card debt, as it is about distribution of assets.
The fairness of an equitable distribution scheme should not be dissected and determined in piecemeal. Instead, it must be viewed within the totality of the total award to determine if the mandate of a fair and just division of marital property has been achieved. Steneken v. Steneken, 183 N.J. 290 (2005).
Since creation of New Jersey’s Equitable Distribution Statute in the 1970s, courts have upheld the basic definition of marital property as any and all property acquired during the marriage. Liabilities, like assets, are considered to be marital property.
Timeshares can be particularly problematic as they often hold little value on the secondary market. In this case, value of the timeshare was determined to be $45,000, while the mortgage was more than $250,000. Defendant in the case argued she should still be entitled to use of the timeshare, since property division determination reduced her award by half the timeshare’s negative equity.
The appellate court disagreed, in part citing the case of Bowen v. Bowen, 96 N.J. 36, 41 (1984), in which the court ruled: “elimination of the source of strife and friction is to be sought by the Judge in devising the scheme of distribution, and the financial affairs of the parties should be separated as far as possible.”
Divorce attorneys in Monmouth understand division of debt can be even more critical than division of assets when it comes to setting a client up for the best chance of success in their new life.
Creditors do not care what your divorce agreement stipulates. If you remain on joint debts post-divorce, you can and will be found responsible for paying those debts in the event of default by a former spouse.
Resolving to not waste time and money on meaningless squabbles can allow you and your chosen law firm to better focus on winning a comprehensive property settlement that will not leave you on the hook for the debts of the past.
Call Rozin|Golinder Law, LLC today for a free and confidential consultation.