A marriage can end in divorce, but this does not mean your debts will no longer need settled. When you dissolve your marriage, it is important to understand the laws and rules governing debt and divorce in the state of Michigan.
Just like assets, Michigan laws categorize debts as marital and non-marital debts. However, the court does not always rely on this categorization as the only guide when ruling on marital debt.
How to divide debt during your Michigan divorce
- Fair division of debt does not quite mean an equal division
Michigan divorce laws require the court to divide any assets and debts in the marriage fairly. However, it is crucial to acknowledge that this never quite means an equal division of the assets and debts. If only one spouse worked while the other stayed at home taking care of the house and children, dividing marital debts on a 50-50 basis would not be fair to the stay-at-home spouse. The nonworking partner may not have the skills, education or experience to find a job that pays their living expenses let alone their half of the marital debt.
- Creditors are not obliged to recognize debt division agreements or orders
While the divorce court can direct the parties involved to share debts in a particular manner, creditors are never obliged to acknowledge this directive. If one of the parties is a co-signer or if the debt is in the name of the other party, the creditor is free to pursue all legal options at their disposal to claim what they are owed.
- A short marriage may be treated differently
Sometimes, the court may consider returning each party to their original financial status before the marriage. This usually happens when the marriage is less than five years old. Under such circumstances, the court may decide to review and divide the debts so that each party has nearly the same percentage of debt that they brought into the marriage.
Debt division during a divorce can be very tricky. Learning more about this complex process can help you get the results you deserve.
