Dividing Debts in an Oklahoma Divorce is a process that at times in overlooked. Given the emotion and general disruption surrounding an Oklahoma divorce people tend to overlook some of the debt. Our clients often wonder how property gets divided along with debts of the marriage. This is especially true for how debt is divided in the final decree. For divorces with money and other assets as a crucial piece of the divorce, spouses often fear that they’ll be saddled with marital debt that should be assigned to the soon to be ex. This article will explain the process for dividing debts in divorce.
Dividing Debts in Divorce
Types of Marital Debt
In Oklahoma debts are typically one of two categories: separate or marital. Further, Oklahoma follows the equitable division doctrine and has a list of requirements regarding property during divorce. This means that debt divides fairly, but not necessarily evenly. This doctrine applies to all marital property. Separate debt is solely the responsibility of the person incurring the costs.
Debts are either “secured” or “unsecured” by law. The difference between the two is simple. If you have collateral, or property, that can be seized for unpaid debt then you have secured debt. A good example is debt in a car loan. A creditor may seize your car if you do not or cannot pay the payments. If the debt is unsecured, it does not have collateral and is likely credit card debt or something like it.
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Division of Debts in an Oklahoma Divorce
So, while dividing debts in divorce, the creditors generally follow the collateral on secured debt. If a person receives ownership of a car in the divorce, then that person is responsible for the debt on the car. The spouse giving up the car will no longer be responsible for the loans. Unsecured debt though will divide equally between spouses.
Next, if you have debt from some type of professional degree, then it is generally separate property. The idea behind this is that you have the knowledge from the degree which will benefit you in the future, but will not benefit the ex-spouse. Therefore, in a divorce the ex-spouse is not liable for your student loans. The exception is if you use student loans to help pay for things in the household during your marriage. If this is the case, then the loans are marital property and will be the responsibility of your ex-spouse also.
OKC Martial Debt Attorneys
Our family law attorneys understand that dividing debts in divorce can be a tedious process. We have years of experience in family and financial law. Call our offices if you have more questions or need legal representation for your divorce and financial needs. Your first consultation is free.