Erie Debt Division Lawyer

We Help You in Dividing Marital Property in PA

When a couple agrees to divorce, they must determine how their debt will be divided once the divorce is finalized. If you and your spouse are entering a Pennsylvania no-fault divorce with debt, there are a few options from which to choose. The easiest way to deal with debts is to pay them off before divorcing; however, we know that most often this is not a possibility. This means that you and your spouse must decide if it would be better to work together to pay off debts after you are separated or to write up a settlement that divides the debts fairly.

If you and your spouse are entering into an uncontested divorce amicably, then working together to repay your creditors may be a good solution. If you and your spouse want to avoid contact after your divorce is finalized, dividing the debts may be more appealing. It is important to note, however, that many creditors, such as credit card companies, are not bound by divorcing couples' debt division agreements. This means that your credit would be negatively affected if your spouse failed to pay the debts, and the creditor could still come after you for repayment.

Speak with an experienced Erie debt division lawyer today. Call us at (888) 863-9115 or contact us online to schedule a free consultation and get the legal guidance you need to protect your financial future.

How is Debt Divided in a No-Fault Divorce?

Pennsylvania is an equitable distribution state, meaning that during a divorce, marital property, including both assets and debts, is divided in a manner that the court deems fair. However, this does not mean that assets and debts will always be split 50/50.

The court considers several factors when determining how to divide debt between spouses, including:

• The Length of the Marriage: Longer marriages often result in a more balanced distribution of debts, especially if both spouses contributed to the debt accumulation over time. In shorter marriages, the court may be more inclined to assign debt to the spouse who incurred it.
• The Health and Age of Both Spouses: A spouse who is in poor health or near retirement may face greater challenges in repaying debt, and the court may take this into account when determining how to divide debt.
• Income and Earning Potential: The court will consider each spouse’s current income, as well as their future earning potential. If one spouse is more financially stable than the other, they may be assigned more debt, especially if that spouse has the ability to pay it off.
• Contributions to the Marriage: If one spouse contributed more to the marriage financially, the court may assign them more debt. However, contributions can also be evaluated in terms of homemaking, child-rearing, and support for the other spouse’s career.
• Custody and Parenting Time: If one spouse is granted primary custody of the children, the court may take this into account when dividing the debt, as the custodial parent may have greater financial burdens moving forward.
• The Debts’ Purpose: The court may consider whether the debts were incurred for joint or individual purposes. Debts that were used to support the family are more likely to be divided between both spouses. However, debts incurred by one spouse for personal expenses or interests might be assigned to that spouse.

Strategies for Debt Division in Divorce

There are a few ways debt may be handled in a divorce, depending on the situation and the negotiations between the spouses:

Debt Assumption and Refinance

In some cases, one spouse may agree to assume responsibility for a debt in exchange for receiving more assets. For example, one spouse might agree to take on the remaining mortgage debt in exchange for retaining ownership of the family home. In other cases, a spouse may choose to refinance a loan to remove the other spouse’s name from the debt entirely.

Debt Consolidation

If both spouses are jointly responsible for significant amounts of debt, it may make sense to consolidate the debt and work together to repay it. While this is not always possible, consolidating debt into one loan with lower interest rates can help both spouses reduce their individual financial burdens.

Selling Assets to Pay Debt

In some cases, it may be necessary to sell certain marital assets, such as the family home or a second vehicle, to pay off debts. This is particularly common with large debts, such as mortgages or auto loans, where one spouse cannot afford to take on the debt themselves.

Assigning Debt Based on Income

If the couple is unable to reach a fair agreement on how to divide debt, the court will likely divide the debts based on each spouse’s ability to repay them. A higher-earning spouse may be required to take on a larger share of the debt, especially if that spouse will receive a larger share of the marital assets.

Consideration of Separate vs. Marital Debt

Pennsylvania law makes it clear that only marital debts should be divided. Any debt that was incurred before the marriage or after the separation may be considered separate debt, which generally stays with the spouse who incurred it. However, this distinction can become complicated if one spouse made a significant financial investment in the other’s business or career during the marriage.

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What to Consider When Dividing Marital Property?

One of the initial steps to take in dividing marital assets is to calculate the value of your marital property. This includes both assets and debts. Make sure to include everything, since decisions you and your spouse make now will affect your financial health in your future.

As you approach the final phases of negotiating your marital settlement agreement, you may want to consider income earning power. If one spouse has a higher level of earning power than the other, it can be a factor which affects your marital settlement agreement. For example, if your spouse earns significantly more than you, then you might offset the difference by negotiating for more marital property. The reasoning is that he or she can recover the assets quicker and easier, since income is much higher.

If you have been managing the home you may have more room to negotiate with your spouse. This is especially true if you have made career sacrifices in order to help maintain the home. Maintaining a home and taking care of children is often recognized as giving the other spouse the potential to earn more income. You wouldn't necessarily get more, but your contributions to managing the home would have value during negotiations.

Your standard of living established during your marriage is another factor which can come into the negotiations. When working out alimony/spousal support, the financially weaker spouse should be able to continue to live a reasonably comparable standard of living as created in the marriage.

A reduction of marital assets, also known as dissipation, by either spouse can be used as an area of stipulation. If a spouse has abused marital money, this can also leave more room for negotiation. Areas which fall under this category include:

1. Loss of money in risky business ventures;
2. Gambling;
3. Money and or gifts given to a lover;
4. Excessive spending;
5. Gifts given to spouse's family members, especially if the other spouse objected.

Non-marital property can be used to the advantage of a less wealthy spouse. If one spouse has a significant amount of non-marital property and the other spouse does not, this can be used to help the more financially vulnerable spouse.

How to Protect Your Financial Interests in Divorce?

Divorce can be a stressful and emotional time, especially when it comes to dividing marital debts and assets. Our experienced Erie debt division lawyers at Cairns Law Offices understand the complexities of Pennsylvania divorce laws and can help protect your financial interests during the divorce process.

When it comes to debt division in a no-fault divorce, it's important to consider the following:

• Evaluating all marital debts and assets
• Determining which debts are considered marital or separate
• Negotiating a fair division of debts and assets
• Ensuring that any agreements are legally binding

Our Erie, PA debt division attorneys can provide expert guidance and representation to help you navigate the division of marital debts and assets, ensuring that your financial future is protected. 

How Our Erie Debt Division Attorney Can Help You?

It can be hard to determine the best choice for your situation, but a debt division settlement lawyer with vast experience in Pennsylvania no-fault divorces can help you and your spouse write up an agreement. The Cairns Method of Obtaining an Internet-Based Divorce℠ enables our firm to provide clients with fast, affordable divorces. We believe that you deserve professional legal services without the high prices and hidden fees typical of conventional law firms. We can prepare marital settlement agreements for you and your spouse and we will not charge you extra for including more than creditors in your agreement.

There is no need to wait for a lawyer to get around to your case; we have a one-day processing method, which means we process each step of your divorce fast. We send regular updates on the status of your divorce, and if you should have any questions along the way, our office will respond to your emails and phone calls within a day. Our experienced team is committed to providing clients with premium, detailed legal representation at a low cost. We understand that you and your spouse want to dissolve your marriage and handle your debts efficiently and quickly, so call our offices today for a free legal consultation.