Most couples take on debt throughout a marriage, whether it's for a mortgage, medical bill, car, or education. If you and your spouse took on debt intending to pay it off together, but you're now facing divorce, you may be wondering what will happen. Although family law doesn't have a standard formula for splitting debt, some general rules may apply to your situation.

How Are Debts Divided?

In North Carolina, both assets and debts are divided equitably, rather than evenly. In other words, you won't necessarily assume 50% of your marital debt following the divorce. If you and your spouse are willing to comprise and arrive at a reasonable arrangement, it'll likely become a court order. However, if you can't agree on how your debts should be divided, a judge will step in and assign them.

Generally speaking, the only debts up for division will be those that were acquired during the marriage, since North Carolina family law distinguishes between marital and separate property. For example, if you took out student loans before getting married, you'll likely be responsible for them after the divorce.

The court will consider several factors when dividing applicable debts, including the purpose they served and the ability of each spouse to pay them off. In other words, if one spouse has a considerably higher earning capacity than the other, they may assume a much more significant portion of the marital debt. However, to ensure the arrangement is fair, that same spouse may be awarded more assets.

How Are Debts Paid Off?

Family law judges can't change the terms of an existing loan agreement. They can merely order individuals to pay off debt that may not be in their name. If your ex ends up assuming debt that was originally in your name, you'll have to work with the lender directly to change the terms of the agreement. If refinancing isn't an option, it may be possible to liquidate one of the assets your ex was awarded to pay off the remaining balance.

Of course, the same applies to debts that you assume. If any of them are in your ex's name, you'll have to cooperate with the lender to change the terms. Otherwise, you could be accused of violating a court order.

If you want to end your marriage but you’re concerned about the financial impact of divorce, turn to Fulcher Law Firm. Located in Albemarle, NC, this family law practice is proud to represent clients throughout Montgomery and Stanly counties. With more than 20 years of experience, this firm knows how to resolve even the most complicated disputes in their clients’ favors. To learn more about their family law services, visit their website. To request a consultation, call (704) 984-6060.