Even if You Keep the House, You May Be Able to Split the Mortgage
When a couple divorces in Tennessee, the judge splits the assets of the marriage – property, retirement accounts, cars – in a way that is equitable, though not necessarily equal. This ensures that each party is treated fairly in the eyes of the law. Because the last few years have been a difficult time for the economy, however, many couples are now less concerned with dividing what they own, and more concerned about the distribution of what they owe.
Unlike with property division, debt division won’t necessarily be covered by a Marital Dissolution Agreement; in other words, just because your spouse says he’s going to pay the car loan, doesn’t mean you’re not on the hook for it, too.
What the judge examines when it comes to debt division
Most of the time, the judge will order the receiving spouse to pay the balance of the debt. So, if you keep the car, you’re now responsible for the remainder of the car loan. In cases where you and your ex had shared credit card debt, however, the judge can order you both equally responsible in paying it off. The way the debt is divided depends on:
- What the purpose of the debt was (ie, a car loan to purchase a car)
- Which one of you incurred the debt (ie, you both signed the car loan)
- Which of you is going to benefit from that debt (ie, you, because you’re the one who needs the car)
- Who is in the best position to repay that debt (ie, you can refinance the debt to remove your spouse’s name and still be able to afford the loan)
It’s important to note that not every judge will handle debt division the same way. So a Franklin, Tennessee judge may see thing differently than a judge from, say, Memphis. This can be especially tricky when it comes to family-owned businesses and home loans. Hiring a lawyer with experience handling family law cases in your town in Tennessee is your best bet, because you want an attorney who’s familiar with how different judges in the area think. You’ll be happy you did.