Marital assets and marital debts

[stingray]

What is the name of your state? New Jersey

Thank you all who replied to my previous post!

However, I have another one God knows - divorcing is no fun! Next time I will be soooooo carefull!
Any way - here is the question. My soon-to-be-ex had $20,000 debt before we got married. Now that we are divorcing - am I liable in any way for this debt? He accumulated another $ 10,000 DURING our marriage - am I liable in any way for this debt? He is a business owner and borrowed all this money to invest in his business - which he bought before marriage. He is legally the owner of the business, and this business brings certain profit. Am i in the picture of this profit at all?

Thank you.

 

[seniorjudge]

You may or may not be liable for this debt.

You have not given us enough facts to give you an opinion.

 

[LdiJ]

What is the name of your state? New Jersey

Thank you all who replied to my previous post!

However, I have another one God knows - divorcing is no fun! Next time I will be soooooo carefull!
Any way - here is the question. My soon-to-be-ex had $20,000 debt before we got married. Now that we are divorcing - am I liable in any way for this debt? He accumulated another $ 10,000 DURING our marriage - am I liable in any way for this debt? He is a business owner and borrowed all this money to invest in his business - which he bought before marriage. He is legally the owner of the business, and this business brings certain profit. Am i in the picture of this profit at all?

Thank you.

You are not responsible for the 20k of debt prior to marriage. I can't answer about the further 10k without knowing the structure of the business. If its a C-corp, an S-corp, or an LLC, the loan may be in the business's name with him as a personal guarantor. In that instance its probably not a marital debt.

 

[nextwife]

You are not responsible for the 20k of debt prior to marriage. I can't answer about the further 10k without knowing the structure of the business. If its a C-corp, an S-corp, or an LLC, the loan may be in the business's name with him as a personal guarantor. In that instance its probably not a marital debt.

However, I doubt you can succeed in treating the business debt DURING the marriage as belonging only to his business, yet claim the profits from the business during the marriage ARE marital.

 

[stingray]

He is the owner of the LLC. The loan was taken by him as by a business owner, so I guess he and his business are the guarantor.
Can I assume that the debt (both - before and during) in this case is not going to affect me?

 

[LdiJ]

He is the owner of the LLC. The loan was taken by him as by a business owner, so I guess he and his business are the guarantor.
Can I assume that the debt (both - before and during) in this case is not going to affect me?

Probably not, unless you intend to attempt to claim a share of the business. However, you really need to consult a local attorney. You can certainly argue that the debt was for the benefit of the business, not the marriage, and if he is keeping all interest in the business, then you should be ok.

 

[LdiJ]

However, I doubt you can succeed in treating the business debt DURING the marriage as belonging only to his business, yet claim the profits from the business during the marriage ARE marital.

I am going to disagree with that one a tad. His business is a separate legal entity, but his flow through profits are personal income. I don't think that she could claim a share of the business though.

 

[nextwife]

I am going to disagree with that one a tad. His business is a separate legal entity, but his flow through profits are personal income. I don't think that she could claim a share of the business though.

That is what I was referring to, increase in value of his business during the mariage. One can't, on one hand claim no responsibility bfor business debts, but on the other only the financial benefit/value of the business.

 

[LdiJ]

That is what I was referring to, increase in value of his business during the mariage. One can't, on one hand claim no responsibility bfor business debts, but on the other only the financial benefit/value of the business.

Yes, I agree 100% with that. What threw me was your use of the word "profits" rather than equity.