Dividing Debt in Divorce: Achieve Best Way to Divide Debt to Protect Your Financial Future in Wisconsin
Marriage brings many shared responsibilities, including debts. But what happens to these financial obligations when the marriage ends? In Wisconsin, dividing debts in divorce can be complex and have lasting consequences. This comprehensive guide will help you understand your rights, responsibilities, and how to safeguard your financial well-being by ensuring you understand how to fairly be dividing debts in divorce.
Dividing Debt in Divorce: Understanding Marital Debt in Wisconsin
In the eyes of Wisconsin law, dividing debts in divorce incurred by either spouse during or before the marriage are generally presumed to be shared marital debts in a divorce. This means that both partners can be held liable for debts, regardless of whose name is attached to them. Even more concerning, you can be held responsible for debts you weren’t aware of.
The Wisconsin Marital Property Act outlines that any debt accrued by either spouse within a marriage is presumed to have been made “in the interest of the marriage or the family.” This includes debts acquired before or during the marriage. For example, if both spouses were involved in purchasing a house or a vehicle, the resulting debt is undoubtedly marital. Surprisingly, even if a house is purchased during the marriage and titled to only one spouse, it is considered a marital debt obligation shared by both partners in a divorce.
Moreover, Wisconsin law holds that a spouse can be held liable for debts they had no knowledge of. For instance, if one spouse secretly incurs credit card debt, the other spouse can still be on the hook for it. This shared debt principle is fundamental in Wisconsin divorce cases.
Dividing Debt in Divorce: Exceptions to Shared Debt
While Wisconsin law generally leans towards shared marital debt, there are exceptions. These include debts that support a spouse or child from another marriage or debts resulting from a tort committed by one spouse. However, contesting liability for such debts is an option, albeit with a significant burden of proof. It’s essential to understand that all debts incurred by either spouse are considered marital debts unless proven otherwise and the assumption court will take is that the couple will be dividing debt in divorce.
Dividing Debt in Divorce: Assets Used to Satisfy Debts
In Wisconsin, jointly held property is typically used to satisfy marital debt. However, the courts can also make individually held property available to fulfill marital debt obligations. This concept can be perplexing, as it means that property acquired without one spouse’s involvement may be used to settle debt incurred solely by that spouse. In essence, your property may be used to pay off your spouse’s debts and you end up dividing debt in divorce.
Dividing Debt in Divorce: Determining Your Marital Debt Liability
Wisconsin divorce proceedings revolve around two key legal codes: the Marital Property Act and the Family Code. The Marital Property Act addresses property affected by marriage, while the Family Code governs property and dividing debt in divorce.
Debt is an integral part of the property division process. Typically, parties assess the total debt and allocate it based on who will retain assets linked to it. For instance, if one spouse keeps the family home, they are likely to assume the associated mortgage debt. The ultimate goal is to ensure that, after accounting for assets and debts, both parties end up with an equitable distribution.
Frequently Asked Questions about Dividing Debt in Divorce
How is debt divided in a divorce in Wisconsin?
Debt is considered part of the marital estate and can be divided or paid off by either party. However, it’s important to note that division doesn’t necessarily mean a 50/50 split. It can be tailored to make financial sense. For instance, if one spouse plans to keep the marital home, they may also assume the mortgage debt. Likewise, if one spouse has significant student loans but a higher income to manage them, they might retain that debt.
Who is responsible for credit card debt in a Wisconsin divorce?
Credit card debt acquired during the marriage is generally divided between both parties or paid off using marital assets. However, if the debt can be attributed to one spouse’s individual actions outside the scope of the marriage, that spouse may be held solely responsible. For example, if one spouse accumulated substantial gambling-related debt, they could be required to shoulder it entirely.
Is Wisconsin a community debt state?
Yes, Wisconsin follows community property principles, which extend to debt division. This means that the court can allocate debt between the parties. The law assumes that spouses are open about their debts and financial transactions during the marriage.
How can I protect myself from my spouse’s debt in a Wisconsin divorce?
The most effective way to safeguard yourself from your spouse’s debt is to reach an agreement with them to retain responsibility for their debt. If this isn’t feasible, you’ll need to convince the court that you shouldn’t be held liable for it. Forward-thinking individuals can also address debt allocation in prenuptial or postnuptial agreements.
What is financial infidelity in a marriage?
Financial infidelity occurs when one spouse hides their spending, debt, or credit cards from the other. This secretive behavior can have severe consequences for the uninformed party, including unexpected financial burdens during divorce proceedings.
Seek Expert Legal Guidance
Navigating the complex terrain of dividing debt in divorce in Wisconsin demands expert legal counsel. Attorneys Latrice Knighton and Paul Santilli of Dahlberg Law Group specialize in family law and divorce cases. Their experience and knowledge can be your greatest asset during this challenging time.
Contact us today to ensure your financial future remains secure and to get answers to any questions you may have about dividing debt in your Wisconsin divorce. Your financial well-being deserves the best protection.
For downloadable forms related to divorce proceedings, visit the Wisconsin eCourts Pro Se Forms page: Click here to access forms.