When divorce is represented on TV or in movies, it usually glorifies the divvying up belongings between the separating couple. The reality is, divorce is painful enough and most who experience it don’t wish to extend the process with frou-frou fights over who gets to keep what knick-knacks.
However, one area that does often result in contentious conflict, is the assignment of debts. Many couples going through an Alabama divorce today come to the table with more debts than they have assets. In the state of Alabama, neither property nor debts are approached as a 50/50 split. Rather, Alabama identifies as an “equitable distribution state.” This means that, left up to the courts, the division of assets (property) and liabilities (debts) should be fair and equitable. Although, “equitable” does not necessarily mean equal. Rather, it reflects what the Circuit Court deems to be fair.
Whose is Whose in an Alabama Divorce?
When it comes to the division of property, the courts typically look at the length of the marriage, first. In a shorter-term marriage, each spouse is generally given essentially what he or she came into the marriage with. Whatever of value that was collected or purchased during the length of the marriage is then divided up between the two.
If the marriage was longer-term, the process can get a little more complicated. Judges have much more discretion as to how to divide property and debts, and thus must take more of the particulars into consideration. These considerations could include who contributed the most on the front end and who needs the most assistance at the time of the separation. A judge’s decision may also be affected by which party was accused or suspected of bad behavior, like adultery or forms of abuse. (Code of Alabama – Title 30)
Knowing the elasticity of the bounds of division of property in an Alabama divorce, it is highly recommended that couples retain divorce attorneys who are able to present the case of their client clearly and who are well-versed in the long-term implications of both debts and property that is assigned (i.e. the tax impact of selling any particular asset).
Know What You Need to Know
One of the first pieces of the division of debts puzzle that you should seek to get in order, is knowing what exists. Being caught off-guard by a spouse who may have been less than forthright about his or her debts can be a shock to an already over-stressed system during divorce proceedings. This is why you must be aware of the debts that are genuinely yours and where you stand with credit cards, mortgages, loans, etc. It is recommended that you take advantage of accessing FREE credit report provided by all three credit reporting agencies, like the one found at AnnualCreditReport.com.
Firmly Draw A Line
At this point, you will want to avoid making the debt balance any worse. The best way to accomplish this, is to call the numbers on the backs of your credit cards and cut them off. The existing debt will still need to be dealt with, but this decisive action removes the opportunity for additional purchases to be made.
Realize, this action will effectively cut off yourself, along with your spouse, on jointly held accounts. It is highly recommended that you communicate with your spouse that this action is being taken so that it does not create unanticipated complications. Most spouses choose to cooperate with each other through these proceedings (contrary to media’s portrayal!). It may be helpful to establish a working arrangement regarding designated lines of credit or establish firm limits on spending that may remain available.
When it comes to proceeding with an Alabama divorce, as much as it lies within you, it is best for you and your spouse, along with your respective attorneys, to work together to create an amenable solution regarding the division of your debts.
A judge may or may not take all the moving parts and pieces into account when apportioning arrears. For this reason, and purely for simplicity’s sake, you should consider the following options related to paying debts:
- Agree to pay them off right away. (the best option!)
- Agree to take responsibility for the debts in exchange for more assets to compensate you.
- Agree for your spouse to take on the debts and to then allow him/her more assets to compensate them.
- Agree to divide the debts and assets equally. (the worst option!)
The reason for equal division of debts and assets being the worst option, is that until both parties’ portion of the debts are paid off, you remain vulnerable. Alabama divorce proceedings will typically not protect you in the event of a third party’s interference in the indemnity agreement. Even with some kind indemnity agreement that indicates your spouse’s agreement to hold you harmless for the repayment of the debt, as long as the debts remain, you still remain at risk.
Don’t Go It Alone
Sometimes you and your spouse may not agree on the distribution of the marital assets and the impact of debt that you could become responsible for during and after the dissolution of your marriage may be severe. However, with the right divorce attorney on your side, we can help you navigate this tough time so that an equitable result can be achieved. You don’t have to try to carry the burden alone. Schedule a consultation with our legal team to evaluate your situation and develop a plan to move you forward.