Under North Carolina law, “marital” debt is considered debt that is incurred after the date of marriage and before the date of separation by one or both spouses for the joint benefit of the parties. The fact that debt is established in the name of one spouse individually does not determine whether the debt is a marital debt or a separate debt for purposes of equitable distribution of the marital and divisible property and debts.
In an equitable distribution proceeding, a party claiming that a debt is marital debt has the burden of proving that the debt was created after the date of marriage, that it existed on the date of separation, the balance of the debt as of date of separation, and that the debt was incurred for the joint benefit of the parties. Likewise, a party claiming that a debt incurred during the marriage is the separate property of the other spouse has the burden of proving that the debt was not created for the joint benefit of the parties. Debt that is incurred before the date of marriage or after the date of separation is considered the separate property of the spouse who incurred the debt, and separate debt is not subject to equitable distribution.
It is possible for a debt to be “mixed,” or part marital and part separate property. An example of mixed debt would be if a spouse had a credit card at date of separation with an outstanding balance, and after the date of separation that spouse made additional charges on the credit card. In this situation, the balance owed on the credit card attributable to the post-separation charges would be separate debt while the amount attributable to the charges incurred during the marriage would be marital debt subject to equitable distribution between the parties.
This article is for information purposes only and is not to be considered or substituted as legal advice. The information in this article is based on North Carolina state laws in effect at the time of posting.