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Dividing Debt in Divorce

When going through a divorce, many couples separating find themselves constantly disputing about assets and debt. So how can two people getting a divorce split both of their property equitably?

In the South Carolina Equitable Distribution statute, it says that, “assets acquired during the marriage as well as “...any other existing debts incurred by the parties or either of them during the course of the marriage” are considered part of the marital estate.” Evidently, both assets and debt will be split fairly, but that does not mean right down the middle. 

For instance, one person starts a small business, which consequently fails; therefore, they end up acquiring a significant amount of debt after. Thus, is it fair if the other spouse has to pay for 50% of this incurred debt? Essentially, we must look at the “...contribution of each spouse…” and if “...the debt was incurred for the joint benefit of the parties…” It is feasible that the party who obtained the debt will be allocated with the bigger share of the debt. However, the innocent person will not avoid full responsibility. 

Without strong factual evidence, complete avoidance of responsibility for marital debt will be very complex. Nevertheless, dividing debt in divorce does not have to be an expensive and stressful fight over assets and debts. 

Once financial and accurate information from both parties is exchanged and rational arrangements are commenced, all the greater for the conservation of the family, their resources, and their emotional and mental well being.