Couples in Wisconsin tend to share all of their resources and obligations, from their homes to their mortgages. If someone files for divorce, addressing the marital estate to divide it between the spouses is a necessary part of that process.
Most people recognize that they need to divide their marital property. They also typically need to split up their marital debts. Marital debts can range from a mortgage and a car loan to credit cards and even student loans taken on during the marriage.
What impact does debt typically have on Wisconsin property division proceedings?
Debt can play a major role in asset distribution
In Wisconsin, judges can potentially help divide any assets or debts accumulated by the spouses during the marriage. Spouses who don’t reach their own settlement, then the judge determines the most reasonable way to split both of their assets and their debts based on a variety of factors.
There is a presumption in Wisconsin that an even distribution of marital assets and debts is fair, although a judge can deviate from that presumption in some circumstances. Equal division does not necessarily mean that a judge decides to split each credit card balance or financial obligation in half.
Instead, they consider the value of marital debts in addition to the value of marital resources when making overall property division determinations. In some cases, one spouse may end up responsible for far more debt because they received more property or because of an otherwise uneven economic situation.
Spouses can sometimes ask a judge to exclude certain debts because they existed prior to marriage, were taken on after the divorce or are the result of the dissipation of marital assets. Taking on inappropriate levels of debt by engaging in unusual financial conduct during a divorce may lead to a judge excluding those debts from the broader property division process.
Debts can often be a major sticking point during property division negotiations, as people both resent the idea of taking on debts their spouse accrued and worry about leaving a spouse responsible for an account on which they may be a co-signer.
Understanding how debts can factor into the broader property division process can be beneficial for those preparing or responding to a Wisconsin divorce filing. The way that people handle the division of debts and assets can affect their finances for years to come after a divorce. As such, making informed decisions is important, to say the least.