Throughout the United States, any divorce will require a final division of the couple’s shared assets and debts. Depending on the circumstances, the couple may arrive at an agreement regarding the division of marital property and submit that document to the court overseeing their divorce as part of their legal paperwork in the case, or the court may review the spouses’ financial circumstances and issue a decision apportioning both debts and assets. Unfortunately, when most spouses consider the division of their property during divorce, they are prone to think primarily of their assets, and may leave the division of marital debt out of their calculation. Marital debt can be an easily overlooked portion of the marital property that must be divided during divorce. As you prepare financially for the divorce process in South Carolina, consider taking steps to avoid this mistake by scheduling a private consultation with an experienced divorce attorney at King Law Offices. Call 888-748-KING today to be connected with a member of our team at a location near you.
How is Property Divided in a Divorce in South Carolina?
While the division of marital property is a standard part of the divorce process nationwide, the criteria that judges will apply in assessing the validity of a proposed settlement agreement, or in determining the distribution of property in the absence of such an agreement, vary from state to state. Broadly speaking, states can be grouped into one of two categories: community property states vs. equitable distribution states. Within these categories, however, each still will still set its own specific rules for courts to follow in making their determinations.
South Carolina Equitable Distribution
Article 5 of South Carolina’s Code of Domestic Relations provides for the “equitable apportionment” of a couple’s shared property in the event of a divorce. S.C. § 20-3-610 specifies that a couple’s marital property becomes subject to such apportionment by a South Carolina family court as soon as the divorce proceedings are initiated, while S.C. § 20-3-620 lays out the factors that judges in the state’s family courts are directed to consider in making their determinations regarding the distribution of property between the spouses. Often, courts will issue temporary orders regarding how the couple’s shared assets (such as bank accounts and personal vehicles) and debts (such as mortgages and shared credit cards) should be handled while the divorce is pending.
Separate Property vs. Marital Property
While states may be classified into either “community property” states such as California or “equitable division” states like South Carolina, generally speaking any state will apply some rules drawing a distinction between marital property vs. separate property. Marital property is owned jointly by the divorcing spouses, and it is this property which will be divided (either in a settlement agreement filed by the spouses or as directed by the court overseeing their case) in a divorce. Separate property, on the other hand, is excluded from the division process, and remains with the spouse to whom it belongs.
In South Carolina, any property acquired by either party during the marriage and not otherwise disposed of prior to the commencement of divorce proceedings is considered marital property unless it meets one of the state’s strict criteria for allocation as separate property, which in South Carolina law is called “nonmarital” property. A court may determine property to be “nonmarital” and therefore excluded from the equitable division process if it:
- Was acquired by inheritance
- Was gifted to one party exclusively, by a giver other than the recipient’s spouse
- Was acquired by either party prior to the marriage
- Was acquired by either party after the initiation of
- A court order for separate maintenance or pendente lite
- A permanent order of separate maintenance and support (alimony)
- A court’s approval of a marital agreement or property settlement between the spouses
- Is excluded by a written agreement (such as a prenuptial agreement) between the parties
Gifts from one spouse to the other are explicitly categorized as marital property and subject to division, while the article emphasizes that South Carolina family courts do not have jurisdiction to divide nonmarital property in a divorce case.
What are Considered Marital Debts?
The umbrella of marital property covers both debts and assets. Marital debt is therefore subject to the same general criteria for allocation as separate vs. marital property as any gift or asset acquired by either party during the marriage.
Marital Debt as a Factor in Equitable Distribution
Additionally, however, marital debt incurred on property that might otherwise be counted among a couple’s shared assets is one of the factors South Carolina family courts are instructed to consider in devising an equitable apportionment of marital property in each divorce case. S.C. § 20-3-620(B)(13) directs courts to first divide between the parties any liens or “other encumbrances” attached to the marital property, according to the same principles of equitable apportionment that apply to the division of property in a South Carolina divorce overall, and then to consider, in devising the court’s equitable apportionment of marital property:
- The summative effect of any encumbrances on the separate property of either spouse
- Any other debts incurred by the spouses jointly or by either spouse individually during the course of the marriage
The calculation of debts and assets can be difficult, especially when one or both of the spouses may have multiple credit cards or complex assets. South Carolina spouses preparing the financial accountings necessary for their divorce filings find it helpful to review their circumstances with the assistance of an experienced family law attorney.
Division of Property vs. Marital Debt Liability
Spouses moving through the divorce process in South Carolina, or those who have recently become divorced in the state, may find it helpful to keep in mind that although the South Carolina Family Court can direct the distribution of marital property as part of its final order granting a divorce, the court will generally not have jurisdiction over the lenders to whom payments are still owed on any marital debts. If both spouses’ names were listed on any particular debt during the marriage, and the debt cannot immediately be discharged (paid off), then during divorce the judge overseeing the case will typically assign responsibility for the debt to one spouse or the other. However, after the divorce is final, if the spouse who assumed responsibility for the debt during divorce falls behind in their finances, then the lender to whom payments are owed may attempt to collect payment from the other spouse, in spite of the court’s orders.
While there are several options for dealing with this frustrating situation and the advisability of the various options will likely depend on a number of factors, such as the amount of the debt and the financial circumstances of the spouse facing unexpected collection attempts, often an attorney with King Law Offices will recommend filing an affidavit petitioning the Family Court for a Rule to Show Cause pursuant to Rule 14, SCRFC. This is the petition typically used for initiating contempt of court proceedings when one party has failed to abide by the court’s orders, and can often provide a mechanism by which a former spouse being pursued for the collection of debts assigned to their ex during divorce can seek the court’s assistance in enforcing its own order.
Speak With an Experienced South Carolina Divorce Lawyer
The division of marital debt is an important, yet often overlooked, part of the overall equitable distribution process followed by South Carolina Family Courts as they divide spouses’ marital property during divorce. While there are rarely easy answers, many spouses find it beneficial to work with an experienced divorce attorney who is familiar with the factors South Carolina courts weigh into considerations as they strive to achieve a division of marital property that will be fair to all parties. To gain perspective on the factors that may affect the division of marital debt in your own South Carolina divorce case, consider scheduling a consultation with a member of the King Law Offices team. Call 888-748-KING today to be connected with a family law attorney in your area.