Divorce is challenging – you must make many critical decisions throughout the process. One of these involves dividing your marital property.
A potential property division wrinkle many fail to foresee? You must divide your marital debt as well. Here are a few considerations when addressing debt in a Louisiana divorce.
1. Community property rules
Louisiana’s community property laws dictate that all marital debts and assets are to be divided equally between the spouses. In terms of debt, this can include credit card balances, mortgages, auto loans and other obligations.
Debts incurred before the marriage or those deemed separate property are not subject to division. Properly categorizing and documenting marital debt is essential to fairness.
2. Factors influencing debt division
Several elements can influence how debts are divided in a Louisiana divorce. The court may consider the purpose of the debt, who benefited from it, and each spouse’s ability to repay.
For example, if one spouse took out a loan for personal expenses, the court might assign that debt solely to that spouse. The judge may also look at each spouse’s potential post-divorce financial situation to determine a fair division.
3. Negotiation of shared debt
Collaborating with your spouse can help you negotiate marital debt division without the court’s involvement. As long as the agreed-upon terms are legal and fair to both spouses, the court may approve your settlement.
It is important to document all debts and both parties should have a clear understanding of each other’s financial obligations. An experienced divorce representative can help during marital property and debt negotiations, facilitating a smoother process.
