During property settlements, liabilities of both parties are given similar importance as the assets and property of parties. Regardless of who is responsible for a liability, liabilities as well as assets form the total asset pool.
A commonly used formula for determining the asset pool which demonstrates the importance of liabilities is:
Total Assets – Total Liabilities = Net Assets.
Net assets are then divided amongst the parties according to the contribution of each party.
Debts are generally shared, however, there are some exceptions, including when one party has wasted the joint assets of the marriage. Such waste can be in the form of gambling, debts incurred recklessly, or deliberate attempts to reduce the asset pool. These are not deducted from the total asset pool. This is confirmed in the case of Kowaliw and Kowaliw.
Other debts which may not be taken into account are in circumstances where a family member has lent a spouse money. This is because there is more of a chance that the debt will not be collected. This situation does not only arise with regards to family members, but can also arise in other situations.
Liabilities of the parties which are deducted from the asset pool include:
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Mortgages
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Credit card debts
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Tax liabilities
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Overdrafts
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Personal loans.
How can Prime Lawyers help you?
At Prime Lawyers we have family lawyers who are experienced in identification and valuation of assets and liabilities. We will assist you in the disclosure of your assets and liabilities whilst ensuring that all assets of the other party are correctly disclosed. If there is any wastage, on behalf of the other party, we will ensure that you receive a fair outcome, and if necessary, we will employ experts to value the assets and liabilities in order to secure the best result for you.