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Dividing assets? Don't forget about debt

One of the most contentious steps in the divorce process is dividing up the assets. Considering all that can be involved and at stake when it comes to dividing up property, it can be important that you are prepared for some of the challenges that lie ahead.

For instance, one thing that could catch you off guard is that it's not just your assets that get distributed; it's also your debts.

In Florida, property is categorized as separate or marital, and then marital property is distributed between divorcing spouses. Debts are treated in much the same way.

Let's imagine you have credit card, student loan or medical bill debts. Just like your assets, you (or the courts) will add up these obligations, categorize them as separate or marital and then distribute them accordingly.

However, some notable complications can arise when it comes to distributing debt. To begin with, debts often exist for several years, making it very possible that you and your spouse were both paying off debts that accumulated before you got married. It is also common for one person to take a loan out in his or her name alone, but use the loan for shared purposes. This can make it very difficult to distinguish whether a particular debt is separate or shared.

Further, unless you take certain steps with a specific creditor, it can continue to hold both you and your ex responsible for repaying debts, even if it was assigned to just one of you in your divorce. This means that if your ex falls behind on a payment, creditors can still come after you and vice versa long after you are divorced.

You will also want to understand that your debts won't necessarily be split evenly in the divorce. In accordance with state equitable distribution laws, marital assets and liabilities will be distributed in a way deemed fair. This means you could walk away with fewer debts but also less money; you could also take on more debt in exchange for being able to keep certain properties.

Dividing assets and debts can be one of the most confusing aspects of divorce, which is why it can be vital that you consult an attorney to guide you through this complex process and help you protect your financial standing. 

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