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How Do Oklahoma Courts Assign Debt in a Contested Divorce?

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assign debt in divorceDebts and liabilities are some of the most common items that must be divided and assigned to each spouse during a divorce.

In Oklahoma, courts use the concept of “equitable division” to divide both assets and debts. This is how courts assign debt in divorce.

The most important step the court takes first is to determine whether the debt is marital debt or separate personal debt. After this determination the court will then assign the debt using the elements of the equitable distribution doctrine.

Marital Debt

The gold standard that defines marital property is property acquired after marriage and before separation. The property, or debt in this case, includes all property that is obtained during marriage regardless of title, and is presumed to be marital property that is only rebutted by evidence presented by the objecting party.

As is common in many broadly construed divorce doctrines, the court has broad discretion in determining how any jointly-acquired debt should be distributed. The court also has broad discretion to determine the method in valuing the debt and the impact on the party who is potentially assigned the debt.

Separate Debt

Separate debt is debt that was obtained before marriage by one spouse, continues to function as separate debt during the marriage, and does not commingle with marital assets. If a spouse uses salary earned during the marriage to pay for the separate debt, this could possibly be considered commingling and be transmuted to marital debt.

Similarly, if the debt – like a credit card – is used to pay for marital assets, this too can be considered commingling of a separate previous debt. Debts become commingled when the debt becomes so confused, blended and intertwined with marital property it becomes impossible to understand the nature of the debt any longer.

The main categories of separate property or debts include inheritances, gifts or anything acquired during marriage using separate funds. A major debt that is often overlooked as separate property is student loan debt. Student loans are the sole responsibility of the party that acquired the debt.

Equitable Division of Debt

Approximately 75 percent of Americans own at least one credit card with an average balance of $6,375, and approximately 65 percent of Americans who own their home also owe on a mortgage.

Debt is widespread and a serious consideration when a couple chooses to divorce. Although one of the first considerations couples make when divorcing is how property is divided. They must consider the manner in which bills and debts are divided.

The court will take into consideration bills the couple has paid jointly and assign the debt based on the concept of equitable distribution. This concept means the court will divide debts fairly. However, that does not necessarily mean equally. If one spouse receives a greater amount of assets, they might be assigned a greater number of debts.

Often if a spouse is assigned a car, the car payment will be assigned to that party, too. Credit cards used primarily by one spouse will generally be assigned to that spouse, unless the assignment of the debt is unjust.

For example, if a homemaker was provided a credit card for home expenses, groceries and other bills, but the other spouse typically made the payments on the credit card, the court will have to take the fairness of assigning major debt to a party that may have trouble with future employment after the divorce is final.

The major factor the courts employ is to ensure that both parties are supported and not penalized as a result of the divorce. Often times alimony is assigned to a spouse to make up for assignment of debt.

Free Consultation with a Tulsa Divorce Lawyer

Being faced with the possibility of insurmountable debt can be overwhelming. The idea of making major payments after a divorce, when you weren’t employed during the marriage, can be overwhelming, too. Going through the divorce process is difficult enough. Hiring an attorney who can expertly represent you is a crucial factor in the process.

By hiring a Tulsa family law attorney to advocate on your behalf and to help facilitate helpful communication with your soon to be ex-spouse, you will have a greater chance to decide how to assign debt without having to appear in court.

Contact an experienced Tulsa divorce attorney for help with child custody and provide expert representation for your divorce.

For a free confidential consultation with a divorce attorney at Divorce Law Office of Tulsa, call 918-924-5526.


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