Secured and Unsecured Debt in a Divorce
Negotiating a fair division of assets can bring significant conflict during the divorce process. As a College Station divorce lawyer can attest, the issue of dividing debts can be all the more adversarial. However, it is necessary that both secured and unsecured debts are divided properly and fairly.
Determining When Debt Was Incurred
Generally speaking, a debt that one of the spouses created prior to marriage will be regarded as separate from the marital estate. This includes money owed on student loans, credit cards, etc. Should indebtedness from before the marriage be added to by both spouses, however, the matter becomes more complicated. A College Station divorce lawyer will assist in helping sort out how such debt should be divided.
Unsecured debts are those for which an asset is not attached. Included among unsecured indebtedness are the following:
- Money owed on credit cards
- Medical care
- Utility payments
At one time unsecured debts tended to be relatively small in comparison with their secured counterparts. While certainly few couples amass debts on credit cards approaching, say, a mortgage, unsecured debt can be substantial these days. Given that such debt is not guaranteed by attachment of assets, creditors will tend to be much more concerned about debtors reneging on payment. However, this can mean that they will be more willing to work out a deal for repayment. For this reason, a College Station divorce lawyer may be very useful in helping negotiate how the debt will be divided and paid.
Secured debt is that which is attached to an asset, such as a home or automobile. Should a debtor fail to pay, the creditor has the option of taking possession of the asset. While unsecured debts like credit cards may in many cases be held separately by spouses (as with accounts set up and charged upon prior to the marriage), secured debt more often is jointly owned.
It is important to keep in mind when determining how secured debts should be divided that it is rarely a good idea to separate them from the assets to which they are attached. For instance, it would be unfair for one spouse to take possession of a car and the other to take on the responsibility of paying for it. Such matters should be worked out with the assistance of legal professionals to ensure that division of debt and assets is fair and appropriate.
Contact a College Station divorce lawyer for Further Assistance
If you need assistance with dividing debts and assets in a divorce, a College Station divorce lawyer at Peterson Law Group will be happy to work with you. We will provide you with quality legal assistance and help you through this difficult matter. Call to arrange a consultation today at 979-703-7014.
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