divorce and family mediation in nyc

jennifer safian, divorce mediator

212-472-8626    info@safianmediation.com

{4:50 minutes to read} Couples going through divorce often choose mediation to work out their divorce and divide up their assets. Sadly, many couples also need to work out how they will Exactly Whose Debt Is It, Anyway? by Jennifer Safianshare the repayment of debts. Here are some examples of the different types of debts they may be faced with:

Home Mortgage

This is usually the largest debt that a couple may have. Whether the house is to be sold at the time of the divorce or later, the proceeds will hopefully cover payment of the mortgage, leaving the parties with some equity to share. If the proceeds of the sale are not sufficient to pay off the debt, the parties will need to decide:

  • To sell the house at a loss and use other funds to pay off the remaining debt
  • To hold on to the property and hope for an improvement of the real estate market
  • Find other alternatives to consider

School Loans

With the increasing costs of education, more and more people take out loans. Even if a parent or a spouse offered to help with repayment, in the end, these loans are the sole responsibility of the party who took them out. When parties separate from their spouse, they take these obligations with them.

Credit Card Debts

If salaries are not sufficient to cover the costs of daily expenses, many resort to using one or more credit cards ending in much debt and tension for the couple. Here are some thoughts on how debts could be handled:

  • When debts are considered joint marital expenses and shared 50/50, parties may each pay ½ of the minimum required monthly by the credit card company until the debt is payed off, or they may pay it off sooner, saving interests costs.
  • When there is a large discrepancy in incomes, the parties may opt to share the debt proportionately to their incomes.
  • When the parties disagree on what is a reasonable purchase and what is not, they need to work out how much they will each pay. Itemizing each purchase on two separate lists can be helpful in determining that.
  • Couples selling a home with a sizable amount of equity in it may decide to pay off all credit card debts from the proceeds of the sale, and then share the remainder of the equity.

One more thing: Find out from the financial institution how the credit card accounts were set up and what your responsibility is regarding a former spouse’s debts if they fail to pay on time.

Overdue Taxes

Couples need to work out how they will share payments due to the IRS.

Personal Loans

Loans made to one or both parties by family members or friends.

Loans against a Retirement Account

Taking money out of retirement accounts before retirement age comes with penalties and tax payments. In some cases, one can borrow money from a retirement account without being penalized, as long as the money and interests are repaid within a specified amount of time.

Car Leases

Car leasing is very popular these days. But when couples are separating, they need to decide who will take the car(s) and with it, the responsibility of the lease.

Don’t leave your marriage without working out your debts along with all your other decisions. Mediation allows parties to come to joint decisions on how to deal with these encumbrances. I have worked with many couples who were able to come to a resolution even though at first it all seemed overwhelming.

Make it your goal to start your new lives without carrying unresolved issues with you.


Comments from Social Media


Very good information about a couples’ debt before a divorce, Jennifer!

Ligia Fleckenstein


Jennifer Safian

jennifer safian. divorce and family mediator
divorce and family mediation
upper east side of manhattan (nyc)
new york, ny
(212) 472-8626
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  1. Daniel Burns March 21, 2015 at 1:49 pm - Reply

    Great ideas, Jennifer. It is difficult enough to move on with your life post divorce; carrying debt along with you makes it that much harder.

  2. Julian Block June 3, 2015 at 6:23 pm - Reply

    An excellent article. However, one minor point about ” Couples need to work out how they will share payments due to the IRS.”

    They also need to enter into an installment arrangement with the IRS and adhere to it.

    Otherwise, the IRS might undertake collection actions. Their agreement is not binding on the IRS.

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