When international media magnate Rupert Murdoch divorced wife number two, the media reported, some maintain inaccurately, that the Fox man’s ex received a $1.7 billion divorce settlement. While Murdoch may be in a league all his own, Michael Jordan, Mel Gibson and Garth Brooks are all part of the $100 million-plus club with regard to massive divorce payouts to ex-wives. Tiger Woods is the most recent member of this club, which no celebrity or anyone for that matter would want to join.
When the gravy train comes with collection calls
While most divorce cases don’t involve 10-figure sums, many people involved in divorce focus on the fact that all assets and marital property are to be divided between spouses. What many people don’t anticipate is that any debts that exist are also divvied up. In this day and age, debt can take the form of everything from credit card bills to mortgages. Divorce is frequently the time when less financially involved spouses discover the extent to which they have been living in the red.
How is debt divided in divorce?
In Florida, assets are divided based on a principle called equitable distribution, which means that the court uses several key factors to develop a fair dispersal of money and property. With regard to debt, courts also rely on equitable distribution and look at the following criteria:
Earning potential and income of each spouse
Health and age
The court also looks at other indicators, including respective financial and intangible contributions to the marriage. Experts recommend that it is almost always advantageous for divorcing couples to propose debt division on their own, to avoid decisions made by judges who may not be able to accurately assess all of the issues at play.