A lot of attention is given to the division of property in a divorce, which party gets the house or the car or the boat. People rarely seem to talk about the division of debt in a divorce, specifically how that debt is classified and then divided by the court between divorcing spouses. Equal attention should be given not only to what you get but what you have to pay. Sometimes the division of debts and assets will cancel each other out, leaving you to begin again financially. While every situation is different this article will attempt to address the five general things you should be aware of when dealing with the issue of debt and divorce in Wisconsin.
Division Of Debt In Wisconsin Divorce
If you are wondering if debt is shared in a divorce the answer is yes, depending on the type of debt. Wisconsin considers debt acquired over the duration of a marriage to be marital debt. Absent a pre-nuptial agreement or some stipulation between the spouses, the court will divide the marital debt equally between the divorcing parties. Prior to dividing the debt, the debt must first be properly classified, which is why it is vital for the parties to provide their attorney with an accurate accounting of all debt at the time of filing for divorce.
Personal Debt From Before The Marriage In Wisconsin
While you cannot be held liable for the debt a partner brings into the marriage with them, you can still be negatively impacted by it. If one spouse has considerable personal debt or bad credit it will affect you either from the loss of financial contribution to the marriage because they have to pay off debt from before the marriage or affect your chances when you jointly apply for a loan. It can mean paying higher interest rates or being unable to qualify for a home loan.
Debt From The Marriage
Let's explore what is considered marital debt in Wisconsin. In Wisconsin, any debt acquired during the marriage for the benefit of the family is considered marital debt. It doesn’t matter if the debt is from building a home, paying utility bills, or just putting dinner and a movie on your joint credit card…. it’s all considered marital debt. Furthermore, you do not have to have been married in Wisconsin for this rule to apply. If you marry in another state, then move to Wisconsin and eventually divorce there you will be subject to Wisconsin’s definition of marital debt and the debt will be divided accordingly.
Who Is Responsible For Credit Card Debt In A Wisconsin Divorce?
The division of credit card debt from the marriage can be complicated. While there will be the joint accounts that you know about and used on a regular basis, there might also be debt that you didn’t know about and still could be ordered to pay. For example, if your soon to be ex-spouse gets a credit card without your knowledge and uses it while you are married, you could be liable for the debt even though you didn’t know about it or take any part in actually creating the debt.
What Happens To My Student Loan Debt If I File For Divorce?
If the student loans were taken out prior to marriage the debt is considered individual debt. If the student loans were taken out during the marriage, especially for the good of the family, it is considered marital debt and could be divided between the divorcing spouses. When it comes to dividing the student loan debt, the court will consider all the facts surrounding the marital student loan debt before potentially dividing it, it is not automatic.
Division of debts in a Wisconsin divorce can be a landmine of potential problems. Prior to agreeing to any division of debt you should consult with a Wisconsin family law attorney so that you have a clear understanding of what to expect financially when your divorce is finalized. Feel free to contact us for a consultation, we would be happy to help you through the process.
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