Michigan courts follow equitable distribution when dividing the marital estate in a divorce. This approach seeks to allocate property in a fair and just manner, taking into account the unique circumstances of each marriage. Rather than simply splitting everything down the middle, courts aim to create a division that reflects the contributions and needs of each spouse. Courts apply this same principle when dividing debt between couples. Understanding what this process means for your case can help you make informed decisions during divorce proceedings.
What factors do courts consider when dividing debt?
Just as assets are divided fairly, so too are the financial obligations the couple accumulated throughout the union. By considering various elements, the court strives to reach a decision that is both equitable and reflective of each spouse’s circumstances. These include:
- Income of each spouse: A higher-earning spouse may receive a larger portion of the debt, as the law presumes that they have a greater ability to repay it.
- Financial contributions during the marriage: If one spouse was the primary breadwinner while the other managed the household, this may influence the debt division.
- Length of the marriage: Liabilities in longer marriages typically fall under joint obligations. On the other hand, in shorter marriages, courts may try to trace debts to individual spouses.
- Future earning potential: If one spouse has significantly higher earning potential due to education or career advancement, the judge may assign them more debt.
Remember, the specific circumstances of your marriage and financial situation will play a critical role in determining your debt allocation. In Michigan, the law aims not just to divide the debts you accumulated during your marriage but also to create a foundation for your future financial stability.
How can you take control of your future?
As you prepare for the legal proceedings, remember that you have options. You can work toward paying off shared debt before finalizing your divorce. You might also consider selling jointly owned assets to clear debts and focus on building your individual credit. By taking proactive steps to manage your debt, you can emerge from your divorce with a sense of stability and confidence.