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Cases of Interest: Debts
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ALABAMA: Smith v. Smith, 703 So. 2d 418 (Ala. Civ. App. 1997).
The husband could be found in contempt for failing to satisfy an income tax debt as required by the parties' divorce judgment, which incorporated a separation agreement allocating tax liability to the husband.
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ARKANSAS: Hunt v. Hunt, ___ Ark. ___, 15 S.W.3d 334 (2000).
The margin debt that was owed to a securities brokerage firm on an account under the husband's name was a marital debt for which the wife was also responsible.
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ARKANSAS: Whisnant v. Whisnant, 68 Ark. App. 298, 6 S.W.3d 808 (1999).
The husband was entitled to a setoff of one-half of the payments he made after the date of separation toward marital debts designated in the final order.
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COLORADO: In re Marriage of Plesich, 881 P.2d 379 (Colo. Ct. App. 1994).
"Hold harmless" provision in the dissolution judgment was intended to require that the husband compensate the wife for the fair market value of the property apportioned to her in the property division.
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COLORADO: In re Marriage of Speirs, 956 P.2d 622 (Colo. Ct. App. 1997).
Unpaid student loans obtained by the wife during the marriage were marital property and were properly distributed between the parties.
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CONNECTICUT: Carroll v. Carroll, 55 Conn. App. 18, 737 A.2d 963 (1999).
Where a statute provides that at the time of the entering of the divorce decree the trial court may assign to either the husband or the wife all or any part of the estate of the other, it also authorizes the trial court to order the husband to assume the burden of paying the outstanding debt that was owed to the wife's mother.
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DISTRICT OF COLUMBIA: Bernard v. Bernard, 730 A.2d 663 (D.C. 1999).
The trial court's failure to mention the husband's substantial individual tax liability required remand for consideration of what effect the debt should have on the distribution of marital property and debts.
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FLORIDA: Kranz v. Kranz, 737 So. 2d 1198 (Fla. Dist. Ct. App. 1999).
Credit card debt incurred by the wife during voluntary separation but before the filing of the petition for dissolution is not necessarily nonmarital debt, nor is it subject to unequal distribution.
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FLORIDA: Adkins v. Adkins, 675 So. 2d 199 (Fla. DCA 1996).
The husband's interest in the wife's profit-sharing plan pursuant to the parties' dissolution judgment was not a debt owed by the wife and therefore was not discharged in her bankruptcy proceeding after the dissolution.
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FLORIDA: Walton v. Walton, 657 So. 2d 1214 (Fla. DCA 1995).
The parties' contractual obligation to prepay the college tuition of their children was a marital liability which could be assigned as part of their property division.
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FLORIDA: Miner v. Miner, 727 So. 2d 1080 (Fla. Dist. Ct. App. 1999).
The husband's debt for medical expenses incurred after the parties' separation would be a marital obligation if the injury causing the expenses occurred during the marriage.
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FLORIDA: Johnson v. Johnson, 725 So. 2d 1029 (Fla. Dist. Ct. App. 1999).
Debts owed by the husband's nonmarital businesses were nonmarital even though they were personally guaranteed by him during the marriage.
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ILLINOIS: In re Marriage of Drury, 317 Ill. App. 3d 201, 740 N.E.2d 365 (2000).
The court was within its discretion when it allocated to the wife the responsibility for a third mortgage on the marital home and the debt of one credit card.
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ILLINOIS: In re Marriage of Dunseth, ___ Ill. App. 3d ___, 633 N.E.2d 82 (1994).
The trial court erred by ordering that the wife should not be responsible for any part of the parties' staggering debt.
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ILLINOIS: In re Marriage of Heinze, ___ Ill. App. 3d ___, 631 N.E.2d 728 (1994).
The parties' marital estate included the amount of funds which the husband withdrew during separation and transferred to his mother as repayment of a supposed loan.
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INDIANA: Miller v. Miller, 763 N.E.2d 1009 (Ind. Ct. App. 2002).
A money judgment for child support arrears is property of the child, not property of the receiving parent, and therefore cannot be treated as marital property. In an all-property state, if the court elects not to divide the husband's premarital interest in his retirement plan, it is error to divide the wife's premarital equity in the marital residence.
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INDIANA: White v. White, 666 N.E.2d 459 (Ind. Ct. App. 1996).
The husband could not be held in contempt for failing to hold the wife harmless for certain debts as required by the parties' dissolution decree, since the hold-harmless obligation had been discharged in his bankruptcy proceeding after the decree; however, the wife could not be ordered to deed real estate to him as required by the decree, because her obligation to transfer the realty was conditioned on his payment of the now-discharged debts.
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INDIANA: Fuehrer v. Fuehrer, 651 N.E.2d 1171 (Ind. Ct. App. 1995).
Debts incurred by one spouse for medical expenses and other necessaries after the filing of a dissolution petition are not debts of the marriage to be paid out of the marital estate.
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INDIANA: Capehart v. Capehart, 705 N.E.2d 533 (Ind. Ct. App. 1999).
The husband's debt for loans incurred to finance his higher education before the parties' marriage were properly distributed to him.
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IOWA: In re Marriage of Moomaw, No. 1-119/00-869 (Iowa Ct. App. June 13, 2001).
The husband claimed that the debts that the wife incurred after the parties separated should not have been considered as debts of the marriage.
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KANSAS: In re Marriage of Ray, ___ Kan. App. 2d ___, 905 P.2d 692 (1995).
Although the wife's debt to a particular creditor was discharged in bankruptcy, she could be held in contempt for failing to honor her agreement to hold the husband harmless for that debt unless he had filed a claim regarding the hold-harmless provision in the bankruptcy proceeding.
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MARYLAND: Freedenburg v. Freedenburg, 123 Md. App. 729, 720 A.2d 948 (1998).
A loan borrowed from a life insurance policy owned by the husband's solely owned professional company was not a marital debt since the loan was akin to an advance payment; but money borrowed against a son's life insurance policies was a marital debt since the money had to be repaid.
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MISSOURI: Held v. Held, 896 S.W.2d 709 (Mo. Ct. App. 1995).
The trial court did not abuse its discretion by awarding the marital home to the wife while assigning to the husband the responsibility for any indebtedness owed to his parents for the home.
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NEW JERSEY: Pascale v. Pascale, 140 N.J. 583, 660 A.2d 485 (1995).
Stock options awarded after the filing of a divorce complaint but obtained through efforts expended during marriage are subject to equitable distribution.
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NEW JERSEY: Clark v. Clark, ___ N.J. Super. ___, 737 A.2d 189 (Ch. Div. 1999).
An insurance surcharge that resulted from the wife's conviction for driving while intoxicated and leaving the scene of an accident was a nonmarital debt for which the husband owed no duty of contribution.
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NEW YORK: Bogdan v. Bogdan, ___ A.D.2d ___, 688 N.Y.S.2d 255 (1999).
The parties should be required to share equally the marital debt.
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NEW YORK: Fiedler v. Fiedler, ___ A.D.2d ___, 646 N.Y.S.2d 839 (1996).
The trial court's decision to make the husband solely responsible for tax liabilities incurred through his investments in questionable tax shelters would not be disturbed.
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NORTH CAROLINA: Adams v. Adams, ___ N.C. App. ___, 443 S.E.2d 780 (1994).
Marital funds expended to pay off the husband's separate debt cannot be classified as marital property.
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NORTH CAROLINA: Mrozek v. Mrozek, ___ N.C. App. ___, 496 S.E.2d 836 (1998).
A marital debt owed by the husband to his parents was enforceable even though the statute of limitations had run on the debt.
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NORTH CAROLINA: Becker v. Becker, ___ N.C. ___, 489 S.E.2d 909 (1997).
The husband did not meet his burden of showing that a debt for his dental work was for the joint benefit of the parties so as to justify classifying it as a marital debt.
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OHIO: Vaughan v. Vaughan, 131 Ohio App. 3d 364, 722 N.E.2d 578 (1999).
The wife's award of one-half interest in the husband's pension and one-half interest in the husband's deferred compensation was not "debt" for purposes of determining its dischargeability in bankruptcy.
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OREGON: In re Marriage of Landsem, 144 Or. App. 555, 927 P.2d 625 (1996).
Funds that the wife received from her mother during separation should have been treated as a gift rather than as a marital debt.
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UTAH: Finlayson v. Finlayson, 874 P.2d 843 (Utah Ct. App. 1994).
The trial court should equally distribute marital funds which the husband withdrew during separation, even though he used the funds to repay a marital debt to his mother.
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VIRGINIA: Kelker v. Schmidt, 34 Va. App. 129, 538 S.E.2d 342 (2000).
The trial court was not required to accept the commissioner's finding that two purported loans incurred by the wife to pay marital expenses during the marriage were marital debt to be divided.
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VIRGINIA: Bogart v. Bogart, 21 Va. App. 280, 464 S.E.2d 157 (1995).
The bankruptcy court had the authority to allow the state court to decide the validity of the parties' property settlement, even though the bankruptcy court itself had declined to approve the agreement.
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VIRGINIA: Hayes v. Hayes, 22 Fam. L. Rep. (BNA) 1131 (Va. Ct. App. 1996).
The husband borrowed money from his wife to pay child support to a former wife and to improve his separate property. Upon divorce, the trial court held that it lacked authority to order the husband to repay the loan, reasoning that the loan was a nonmarital obligation.
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WYOMING: Richardson v. Richardson, 868 P.2d 259 (Wyo. 1994).
The discharge in a bankruptcy proceeding of a number of debts allocated to the husband in the divorce decree constituted a "change in circumstances" justifying modification.
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