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What is the Division of Marital Debt in a Michigan Divorce?

On Behalf of | Jan 21, 2020 | Uncategorized |

Under Michigan divorce law, all marital property is divided according to a theory of equitable distribution in a Divorce. Since Michigan is an equitable distribution state (like a majority of other states in the U.S.), the court will divide all property that it classifies as belonging to the marriage in such a way that it considers to be fair to both parties. It is important to remember that fair does not mean equal. Instead, the court takes into account a wide variety of factors from the specific case and the family’s particular situation in determining what kind of property division would be fair to both spouses.

While many married couples in Michigan who are planning for divorce are thinking about the ways in which certain assets will be classified and distributed, it is essential to think about debt from the marriage, as well. To be sure, the division of marital property in a divorce includes both assets and debts. How will your marital debt be divided in your divorce?

Classifying Marital Assets and Debt

When a Michigan court is making a decision about how to divide marital property, it is thinking about both assets and debts from the marriage. The process of classifying assets as marital or separate assets happens at the same time that debt is similarly classified. In other words, when the court decides whether certain assets should be classified as separate property and thus not subject to division, or classified as marital and subject to division, the court will also classify debts as separate property or marital property.

Generally speaking, like assets, Michigan law (MCL 552.401) makes clear that separate debt will not be divided between the spouses in the event of divorce unless the other spouse “contributed to the acquisition . . . or accumulation” of that debt. For example, if one of the parties acquired $50,000 in credit card debt prior to the marriage, that debt likely will be classified as separate property and will remain with the spouse who acquired it unless the other spouse also made charges on that credit card during the marriage. When debt is classified as marital property, it will be divided between the spouses.

Factors for the Division of Marital Assets are the Same for Marital Debt

When a court decides how to divide marital debt in a manner that is equitable to both spouses, it considers the same factors for dividing marital assets. Those factors can include:

  • Length of the marriage;
  • Needs of both spouses;
  • Earning capacity of both spouses;
  • How property was acquired; and
  • Other factors that the court decides are relevant to the particular case.

If you do not want the court to make a determination about how to divide marital debt, you can negotiate a property settlement with your spouse that includes the distribution of both marital assets and debts. You should speak with a Michigan divorce attorney about your options.

Contact a Michigan Divorce Attorney

Do you have questions or concerns about dividing marital debt in your Michigan divorce? An experienced Michigan divorce attorney can speak with you today. Contact the Law Offices of Michael A. Robbins to learn more.