Category: Divorce

What is the Impact of Marital Debt?

Posted on

By Amy A. Edwards

I recently had a client ask what it means, exactly, to have marital debt. That’s a fair question. In North Carolina, the legal process of dividing marital assets and marital debts is called equitable distribution. Spouses or former spouses have a marital estate, and each usually gets half of the marital estate.  Think of the marital estate like a pie. Marital assets and marital debts make up the pie, which is sliced and cut in half.

With several exceptions, marital assets are assets acquired by either spouse during the time the parties are married and living together. Marital assets are the starting point of the marital estate pie but if there are no marital assets, then only the marital debt is divided between the parties. Separate property includes things like inherited property or property acquired before marriage. It is not added to the pie, so it isn’t be sliced up and divided between the parties. After the marital assets are divided, the debts are taken into account and either divided or not divided, depending on whether the debts are marital.

To be a marital debt, the debt must be generated during the marriage, and exist at the date of separation. The debt must be for the “joint benefit” of the marriage in order to be marital. Usually, a joint benefit is something that benefits both parties, even if the benefit is indirect, such as using a credit card for groceries, gas in the car, something for the children, etc.  If a debt is a separate debt, it does not have any impact on the pie that is the marital estate. The person with separate debt is stuck with responsibility for paying it. On the other hand, marital debt is “credited” to the share of the marital estate that the person paying the debt will receive. The marital estate is thereby adjusted to account for the payment of marital debts.

Example A (no marital debts)
Marital Assets: $100,000 (house equity, cars, etc.) ÷ 2 = $50,000 each
Husband gets $50,000
Wife gets $50,000

Example B ($10,000 in marital debt)
Marital Assets: $100,000 (house equity, cars, etc.) ÷ 2 = $50,000 each
Husband gets $50,000
Wife gets $50,000

But Wife pays $10,000 in marital debt, so she really only got $40,000.  Husband would owe Wife $5,000 in assets or money so that each spouse gets $45,000 (50% of the adjusted marital estate).  But if Wife paid $10,000 in separate debt (i.e., non-marital debt), she would not get any credit for paying it and each spouse would still get $50,000 in value for his or her share of the marital estate.

 

 

What is a Divorce From Bed and Board?

Posted on

In North Carolina, there are two types of divorces, an absolute divorce and a divorce from bed and board. (DBB).  An “absolute divorce” is a typical divorce that dissolves a marriage and allows a person to remarry. In our state, after a one year separation, either spouse may seek an absolute divorce. In contrast, the court must find there is marital fault before granting a DBB, which requires the spouse at fault to move out of the marital residence. The court enters an official DBB decree, stating that only the husband or the wife shall have the right to live in the marital home.  In that event, the other spouse must leave the home. Why do all of this to separate? Because people are correctly reluctant to move out of the family home for fear of committing abandonment. If a judge rules there is marital fault, it can easily cause a great deal of harm to a spouse during divorce litigation. This DBB process of a judge declaring a person to be legally separated is a rare event indeed, but it is still alive and well in our state.

Laws change. This article is current as of 2023.

Can’t We Just Pick a Date of Separation and Get Our Divorce?

Posted on

The short answer is no, you can’t choose a date of separation. In the real world, efficiency and common sense would suggest that you could. But this is not an agreement to apply for “services” from the government. It is a lawsuit, and a judge must use the law. Divorce is a legal status, similar to a legal status of biological parent in a paternity case, for example. Each state has laws dictating how long a married couple must be separated before they are eligible to divorce. Here in North Carolina, the law requires a one-year separation. This should not be confused with our residency requirement. It requires at least one spouse to live in this state for six months before he or she is allowed to file a claim for divorce, even if the parties have already been separated for a year when one spouse moves here.

All Divorces Are Lawsuits

It can be easy to forget that even uncontested divorces are filed by a plaintiff, served on a defendant, and ruled upon by a judge. In fact, most people don’t even have to be in court. Except for incurable insanity, the only ground for a divorce in North Carolina is a one-year separation. This requires that at least one spouse intends for the separation to be permanent, although there is no requirement that the lawsuit say which spouse intends to remain apart. Examples of one-year separations that don’t fit into this category are couples who are only separated by military service or incarceration. They are not separated unless one spouse intends to remain separated (i.e., that person does not want to move back home when no longer physically separated).

The divorce complaint, the document that starts the lawsuit,  cannot even be signed until the day after the year has passed. When you sign the complaint, you do so under oath, under penalty of perjury, which is a crime. Worse yet, if you lie about the DOS, your fraudulently obtained divorce can be set aside (voided) because you were not separated for one full year.

Why Do We Have to Wait a Year?

The government doesn’t want you to have a fight with your husband or wife, separate for a few days or weeks, get divorced and then reconcile and remarry. Many lawyers, myself included, believe the length of separation is too long. Some states require a longer wait only if the couple has children, and let the non-parents divorce much sooner. Although many believe the waiting period is excessive, it is the law and we must all obey it. There are plenty of others who believe one year isn’t long enough. Our state laws used to require a two-year waiting period. Not too long ago, there was a proposed “Healthy Marriage Act” that would’ve restored the two-year waiting period. In fact, it would have required counseling of some sort for parents and non-parents alike.

Can We Just Stay on Opposite Ends of the House?

Although the idea of separating in the same house is a clever one, it is inadequate. A separation requires living under two different roofs. This can be difficult for couples who don’t have enough money to establish two separate homes. But if separate homes weren’t required for a separation, it would be impossible to clearly identify who is or isn’t separated. Your spouse could claim the one-year separation had already occurred, and you could have a sheriff serve you with a divorce complaint out of the blue. Brand new parents need the whole nine months to figure out what they are doing with this new legal title of parents. And, so it is with divorces. You have to figure out medical insurance, where you will be living for the immediate future, your short-term finances, sometimes your employment, and perhaps what to do about your children. On the upside, the clock no longer stops ticking if there are “isolated incidents of sexual intercourse between the parties . . .” In the past, you could be separated for a long time but any sexual intimacy restarted the clock for one-year separation.

See NC Gen. Stat. §50-6

How a Contract Magically Becomes a Court Order: Incorporation

Posted on

In the world of family law in North Carolina, there are three ways to address agreements: contracts, court orders and incorporation.

Contracts

Contracts are agreements signed by the parties, such as a separation agreement. If someone violates the contract, it is called breach of contract. A contract is enforced by a “specific performance” lawsuit, asking the court for an order requiring him or her to perform the specifics of the contract, such as signing a deed, refinancing a mortgage obligation, etc. A contract generally can’t be changed by the court. However, the court always has the authority to change anything related to child custody and support until a child is 18 years of age, regardless of what the parties set out in a contract.

Court Orders

Court orders are only available after a lawsuit has been filed, and they must be signed by a judge to be valid. The best part about a court order is the remedy. A party who violates the court order is subject to being held in contempt of court for failure to obey the court order. The contempt power of the court gives the judge discretion to do whatever he or she sees fit to enforce the order, depending on the circumstances presented. Although they don’t usually do so until after someone demonstrates they will remain obstinate, judges have the authority to incarcerate someone who continues to disobey court order. Orders can be registered in any state to be enforced with the full faith and credit of another state.

Incorporation

Our state has what is called incorporation, a special process by which a separation agreement “magically” becomes a court order once a judge signs it. But a judge cannot sign anything until there has been a lawsuit filed. Incorporation is done only by agreement, which is usually mentioned in a separation agreement. After a full year of separation has passed, either spouse can file for a divorce. When the judge signs a divorce decree, he or she also has the authority to incorporate it into the decree, permanently making it an order of the court.

Have You Reconciled With Your Ex?

Posted on

Besides obtaining a divorce, the date a couple separates can have a significant impact on equitable distribution of marital assets and debts, child support and alimony. When a married couple decides to call it quits, there is some date they separated.  But when is it? The answer is not always as simple as it sounds. There is a myth that people can’t be separated for purposes of divorce until they have something on paper. That is not the case. In North Carolina, if parties stop living together, and at least one intends the separation to be permanent, they are separated. Physically living apart is a requirement, however. Living in the same home in different rooms or out-buildings such as the garage or “man cave” is usually not enough. Despite what was portrayed in the War of the Roses movie when one duct taped a line down one-half of the house, you can’t do it that way here if your goal is to seek a divorce.

The State Policy

From the viewpoint of the public policy behind this one year waiting period, marriages should be fostered and divorce should be discouraged to some extent.  A waiting period gives spouses time to cool off after a major dispute. The courts would no doubt be much busier if there was no waiting period and either party could apply for a divorce on Monday morning after a fight on Friday night. There is debate about whether the year-long waiting period prevents divorces, thereby preserving marriages. The requirement that at least one of the parties intend for the separation to be permanent makes sense when you think about happily married people who are physically separated because of military service or because one of them spends an extended period of time in the hospital, for example.

What If We Try to Work Things Out?

Another question in determining whether you are separated for the purpose of divorce is whether you have made any efforts to reconcile. If a couple reconciles, meaning they return to the husband and wife relationship they had before the separation, they are no longer separated. If they reconcile and later decide to separate again, the one year wait begins from that second date of separation. Years ago, the one year period of separation required to seek a divorce would start over if the parties had intercourse.  Now, the law says that an isolated act of intercourse will not start the clock over again but beyond that, it is not always clear at what point they reconciled or separated. Reconciliation and making efforts to work things out can lead to one of the spouses moving back into the home, which is almost always viewed as reconciling in legal terms. There is no black and white answer on whether the actions of a couple between those two extremes would require the one year waiting period to begin all over again. The court looks at the circumstances of each case when the date of separation is disputed.

What Are Divorce Papers?

Posted on

People frequently contact an attorney when they receive documents from an attorney or their ex. When someone uses the term divorce papers it can mean a variety of things. Although there are other possibilities, the overwhelming majority of people who receive what they call divorce papers have received one of two things: a proposed contract or a lawsuit. These two things are completely different, and anyone who receives divorce papers from an attorney (or the ex) should immediately consult with an attorney. The attorney will explain what the documents actually are, and advise you of your rights and responsibilities.

Separation Agreements

When spouses can agree about dividing debts and property, alimony if applicable, or child support and custody, they may sign a Separation Agreement and Property Settlement. Attorneys sometimes send a proposed Separation Agreement to the other party to see if there is room to negotiate an out of court settlement. A Separation Agreement is a contract, not a court order. Because it is a contract, a person who violates it can be liable for breach of contract. Contrary to what most people think, there is really not a “standard separation agreement” although there are several paragraphs that are almost always included in most separation agreements.

Like all contracts, the parties must agree to be bound by the terms of the contract, and properly sign or “execute” it and any related companion documents such as deeds or car titles. There is no way to force the agreement if the other person is unwilling to negotiate. No contract can create an actual divorce, which must always be granted by a judge after a lawsuit is filed, even if the divorce is uncontested.

Lawsuits

When people say they are going to get divorce papers that definition might mean they are filing a lawsuit and asking the court for any number of things. A lawsuit might be one for divorce after a separation of at least one year, an emergency domestic violence order, an order for alimony or child custody and support, or equitable distribution, which is the division of property and debts.

When there is no agreement on financial matters or issues concerning children, the only way to force a resolution is to file a lawsuit. In our state, divorce papers for a lawsuit consist of a complaint, which is the document that activates a lawsuit, and a summons. The summons gives the court jurisdiction or the right to order you to do something or stop doing something, like pay child support or divide property by signing a deed or paying a debt.

In family law cases, unlike criminal court, it does not matter if you are the plaintiff or the defendant. You will be asking the court to do the same things regardless of whether you file the lawsuit first. Lawsuits may or may not be related to the divorce itself, although a divorce operates as a deadline for certain claims. Unlike contracts, lawsuit documents must be “served” on the other person. Service is the act of a sheriff handing documents to you, or a few other alternatives. If you are served with a lawsuit, you have a specific deadline to respond. If you fail to act on the documents served upon you, or if you wait too long to act, you risk forever losing the right to file your claims or certain defenses.

What is a Legal Separation in North Carolina?

Posted on

In our state, the term “legally separated” is a term of art used by attorneys, and misused by many non-attorneys. This legal separation is a decree made by a judge after a special trial based on marital fault. The court enters an official decree, stating that you or your spouse was wronged and declaring you separated. Why do all of this to separate? Because people are correctly reluctant to move out of the family home for fear of committing abandonment. Marital misconduct (marital fault) can easily cause a great deal of harm to a spouse’s case. This process of a judge declaring a person to be legally separated is a rare event indeed, but it is still alive and well in our state.  In legal terms, this process of declaring people to be separated, but still married to each other, is called a divorce from bed and board.

What people usually mean is a “separation” that will allow them to get divorced after a year of separation, Two main things are required to be separated for purposes of a divorce. First, the husband and wife must not live together in the same residence for at least one year. Living in the same residence in different parts of the house is not adequate. Second, either the husband or the wife must intend for the separation to be permanent. Note there is no requirement that both intend the separation to be permanent; only one person must. If they are living separately but neither intends to be separated, such as those separated by military service or extensive travel, they are not separated for the purpose of getting divorced.  There is no legal requirement for any documents to be written or signed for people to be separated.  The fact that people live apart, and one of them intends the separation to be permanent, is sufficient to be separated for the purpose of filing for a divorce after one year has passed.

Clients sometimes ask me if they can agree to say they have been separated for a whole year, when they have only been separated a few months. The answer is always NO. Alleging untruthful things in a divorce complaint (the document that generates the lawsuit) constitutes the crime of perjury, whether one person commits perjury or both do, regardless of whether you agree to do so. The process of a judge entering a divorce based on one year of separation is called an absolute divorce.  Once this type of divorce is entered, each person is legally free to remarry if he or she chooses to do so.

 

 

What’s Involved With a Divorce?

Posted on

In North Carolina, marital fault is not required to obtain a divorce. In most circumstances, the parties must be separated for at least one year before either party may file a lawsuit for a divorce. A divorce severs the legal relationship between two married people, and impacts many legal rights and responsibilities. There is no common law marriage in our state, although North Carolina will recognize one if it was validly performed in a state that does permit common law marriage. A divorce is a ruling on the legal relationship between you and your spouse. A divorce makes a critical difference in many important situations, such as health insurance, the way you file tax returns, and retirement and social security benefits, to name a few.

A divorce also controls when you have the right to file claims for alimony and marital property division, your rights to jointly owned property, including survivor rights, and others. If a married person changed his or her name, the divorce decree can restore the use of the original birth name or (under some circumstances) a former last name to that person. Alternatively, a person may file court proceedings requesting the use of the original or former name after the divorce should he or she later decide to do so.  When someone changes names, he or she should report the change to the proper government entities, such as the Social Security Administration and the NC Division of Motor Vehicles. If a lawsuit for a divorce has been filed, there are strict deadlines for filing responses to the lawsuit.  Certain marital rights are permanently lost if claims are not filed by the time a judge enters a divorce decree. ALWAYS consult with an attorney as soon as possible to discuss your rights in the event a divorce lawsuit has been filed.