Minnesota Divorce Debt Allocation

Dealing with Allocation of Debt in a Minnesota Divorce

During a marriage, in good economic times, many couples manage debt and are able to keep current on debt payments. Often, a job loss, medical problem or the beginning of a divorce will tip the balance and the debt begins to pile up. Debt has become a more prevalent issue in divorce given that we are now in the midst of a recession.

During the divorce, dealing with debt is often a much more difficult issue than allocating assets. Individuals can often agree that he gets the boat she gets the car, however, the same individuals will begin pointing fingers for joint unsecured debt because it is hard to remember what was purchased when and who made the purchase. Typically if a car is allocated to a party the same party will pay the car payment because the car is secured. Credit cards and other unsecured debt is more difficult because the debt may relate to vacations, out to eat meals, and personal items with small value. Add to the mix, how the debt is to be repaid on a single income and you have a scenario that can create a War of the Roses.

In certain instances married couples who are able to cooperate are advised to complete a bankruptcy discharge prior to filing for divorce. The bankruptcy discharge can remove one of the sticking points of a divorce. For those couples who are not able to cooperate in a joint bankruptcy an individual bankruptcy after the divorce may also be helpful.