Debt and Divorce in Georgia, Part 1
As a young divorce attorney in the blossoming stages of my career, I have noticed a pattern in many of the cases that I have come across: more and more divorcing couples have significant debt issues. These debt issues may be in the form of credit card debt, home mortgages, or multiple home equity lines of credit. Regardless of the type of debt, one thing is clear – although debt can be a significant issue for married couples, it becomes a much bigger problem to deal with upon divorce.
How much do you owe?
This may seem like a simple question, but it is an essential one. Georgia is an equitable distribution state, meaning that upon divorce both assets and debts will be divided equitably or fairly. However, before any division is made, it is essential to know exactly what is being divided. This is so, especially regarding marital debts, because without full disclosure by both spouses of all the marital debts, one spouse could potentially be left liable for a debt that he or she did not accumulate and did not even know about during the marriage.
In fact, if your spouse has been secretive about your joint financial affairs, you may be totally unaware of how much debt is involved. If this is the case in your situation, your first step should be to try to determine exactly what you are dealing with. Consult with a knowledgeable divorce attorney so that he or she may help you determine the amount of debt that you are aware of and to implement tools like the discovery process to ascertain the amount of debt possibly accumulated by your spouse without your knowledge. Only when you are aware of your complete marital financial picture will you be able to determine how the debt should potentially be shared between you and your spouse upon divorce. For example, it is common for debts that are secured against an asset, like mortgages and car loans, to be retained by the spouse retaining the associated asset. However, unsecured debt, like credit card debt, is often more difficult to deal with.
How should marital debt be divided?
As mentioned above, Georgia courts divide marital debts and assets and debts equitably or fairly upon divorce. But, what does that really mean? There are several cases concerning the meaning of equitable division in Georgia; however in sum, the division of assets and debts upon divorce depend on the circumstances of each case. Thus, there is no formula or set fraction of marital assets or debts that each spouse is required to be responsible for upon divorce. For this reason, many couples seek to settle the issue of asset and debt division among themselves in order to come to the conclusion that works best for each spouse.
By A. Latrese Martin, Associate Attorney, Meriwether & Tharp, LLC