Many high-asset divorces in Tennessee involve households with multiple homes, vehicles, investment accounts, retirement accounts and more. These couples may also have significant joint debts in addition to these assets.
As couples unravel their financial ties, they must divide both marital property and debt.
Mortgages and home equity loans
One of the most common joint debts in high-asset divorces involves real estate, particularly mortgages and home equity loans. The median value of a home in Knoxville is $184,200, but it can be significantly higher for many high-asset couples. The family home, often a major asset, can carry both emotional and financial weight.
Credit card balances
Credit card balances represent another substantial area of joint debts. In fact, these balances often become a contentious issue during divorce proceedings. It is necessary to scrutinize credit card statements to identify shared liabilities and formulate a strategy for addressing them.
Couples frequently share not only their lives but also vehicles, leading to joint auto loans. Untangling the financial web surrounding shared cars is not always straightforward, as the outstanding balances on these loans need to go to one or the other spouse. Additionally, decisions regarding the ownership and usage of the vehicles further complicate this aspect of joint debts.
In high-asset divorces, tax obligations become an important consideration. Joint tax returns may result in shared liabilities. Ensuring that both parties are aware of their responsibilities and potential tax consequences is necessary to avoid post-divorce financial complications.
Personal loans and lines of credit
Beyond the more common joint debts, personal loans and lines of credit also warrant attention. Individuals may have these financial obligations independently. Determining the responsibility for these debts is an aspect of the divorce process.
Both joint and individual debts require a comprehensive approach to ensure a fair and equitable resolution for both parties.