Many marriages, particularly those that are long-term, have considerable marital estates. Those estates may include various assets, but they also include debts. If a couple decides they’re going to divorce, the entire marital estate has to be divided.
During a divorce in Arkansas, the property division process depends largely on what’s equitable instead of what’s equal. Because of this, there’s not always a 50/50 split. Some of the factors that determine what’s equitable include contributions to the marriage, income and sometimes future earning potential.
Balancing debts and assets during property division
There are various ways that assets and debts can be handled during the property division process. One thing to consider when you’re going through this is that creditors don’t have to abide by the divorce order. This means that they don’t have to take one party’s name off a joint account. Because of that, one person failing to pay the debts that they’re assigned could affect the credit reports of both parties.
Some people who were going through the property division process decide to sell off assets so they can pay the marital debts. This provides both parties with a fresh financial start. It also takes away the chance of one party ruining the other’s credit by a failure to pay.
If the debts can’t be paid through liquidating assets, they are usually used to balance out the property division process. When the debts are assigned to parties, instead of being paid off, each party should try to refinance the debt in their own name. This can also remove the chance of both parties being held liable if one party fails to pay.
Going through the property division process can be challenging. It may be beneficial to have someone on your side who can help to explain the options that are available and how they may impact you now and into the future.
