Debt is a fact of life in America. Most South Carolina couples owe a lot of money, whether on their mortgage, car payments, or student loans. You may not think much about the debts you owe as a couple until you file for a divorce. Then debt, and who is going to pay it becomes quite essential. This is why it helps to understand the basics of dividing debts in a divorce.
What Are the Two Types of Debt to Consider When Dividing Debts?
When it comes to dividing debts, there are two types of debt to pay attention to: secured and unsecured.
When you and your spouse are dividing secured debt, the division of that asset is offset by the value of the asset that is securing the debt.
Secured debt also gives the lienholder or lender the right to repossess the property should you or your ex-spouse default on a loan.
Unsecured debt is divided so that you and your ex-spouse each receive an equitable or fair share of the balance of the marital estate.
South Carolina is an equitable division state, which means that the courts can assign you responsibility for debts incurred while you are married even if the debts do not have your name on them. But, you should still be careful when purchasing a property. As far as the creditor is concerned, if only your name appears on the debt, then you alone will have to pay it off in the event you get divorced.
Your Debt and the Family Courts
When you file for your divorce, you know you’re going to have to equitably divide your assets in South Carolina. Your debts are just as important as your assets because they are a factor in you and your spouse’s net worth.
As part of your South Carolina divorce judgment, the court is going to divide your debts and assets, unless you and your spouse have come to an agreement on how the assets and debts are going to be divided.
The court will decide who is responsible for paying the bills when dividing your property and money. Normally, the South Carolina courts will try to divide your assets and debts equally. Still, they can also be used to balance one another. For example, if your spouse receives more property than you, they also may be responsible for more debt.
What Happens if My Ex-Spouse Doesn’t Pay After Dividing Debts?
Perhaps your ex-spouse doesn’t or cannot pay the debts they were assigned when dividing debts in the divorce settlement. This is a potential outcome many people ignore.
In most cases, the creditors may go after your ex-spouse who is responsible for the debt, even though you both may have been responsible for that debt at one time. This is done to protect the creditor’s rights.
The best thing to do if your ex-spouse isn’t paying their debts and the credit company is going after you is to petition the South Carolina court to enforce the divorce agreement. Your ex-spouse will then have to show up in court and explain why they aren’t following the court’s order, and they could be facing fines and/or jail time.
If you can afford to pay that debt, keep the proof of your payment and notify the South Carolina court to request assistance in getting reimbursement from your ex-spouse.
What about Bankruptcy?
Sometimes the end result of a divorce settlement is that you and/or your ex-spouse can’t pay their assigned debts, and you end up in bankruptcy.
It’s important to understand that filing for bankruptcy doesn’t stop any child support or spousal support payments.
The Bankruptcy Court may be able to keep the other creditors at bay. Still, the family support ordered by the South Carolina courts has priority in any bankruptcy judgment.
You must choose the right South Carolina divorce lawyer to represent you. The Greenville, South Carolina divorce attorneys at Bannister, Wyatt & Stalvey, LLC have the knowledge, experience, and skill to guide you through the divorce process and ensure that all your rights are protected.