Married couples generally share economic resources, which means they also share financial responsibilities. Many couples have joint credit card counts or help one another pay their monthly statements even when the account is only in one person’s name. Particularly if the household carries a balance from one month to the next, there can be questions about financial responsibility.
Debt can be a source of stress during a marriage, especially if one spouse spends more than the other consistently. Debts also invariably create challenges during North Carolina divorce proceedings. What typically happens to debts like credit card balances during North Carolina divorces?
Spouses usually share their debts
The equitable distribution law in North Carolina gives each spouse an interest in assets held in the name of only one spouse. The same is true for financial obligations. Both spouses theoretically have a responsibility to help pay off marital debts even if the account is only in the name of one spouse.
The date when people acquired the debt determines whether the debt is part of the marital estate or is the separate property of one spouse. In scenarios where there is substantial marital debt, each spouse may need to assume responsibility for some of the debt. Other times, spouses can reach an agreement where one spouse takes on more debt but also receives more property from the marital estate.
The unique details of someone’s circumstances can influence which approach is best given their family situation. Understanding the basic rules that govern property division and debt-related concerns in North Carolina may benefit those contemplating divorce and worried about their future financial security.