Arizona Family Law Blog

It isn't uncommon for married individuals in Arizona and throughout the country to have student loan debt. When that debt is acquired could play a role in how it is managed in a divorce. Generally speaking, debts accumulated before a marriage remain the responsibility of the person who accumulated them. Debts that were accumulated after a marriage begins could be considered marital property. This means that both parties to the relationship could be liable for repaying them.

Arizona is a community property state, which means that both assets and debts are split 50/50 when a couple gets a divorce. In the event that a spouse cosigned for a loan, he or she is responsible for that debt until it is repaid in full. If the spouse who took on the debt doesn't repay it, the lender could come after the cosigner regardless of what a divorce decree says.

As stressful as a divorce is, it can become even more stressful for a person in Arizona after a job loss. If the person is the higher-earning spouse, there could be concerns about how to pay support.

The person should not take this as an opportunity to pursue a lower-paying job. Courts usually frown on what may appear to be an effort to avoid paying support by remaining underemployed, and judges may still base support amounts on a person's salary history. A court may look more favorably on someone who is laid off compared to someone who is fired, but a layoff from a company owned by family or a friend could look as though the person is trying to avoid support payments. In a case like this, the person may need to document the reason for layoffs. The person might also want to show evidence of searching for another job, including sending out resumes and going to interviews.

Arizona business owners may have unique concerns when they begin to suffer marital difficulties. Of course, the financial consequences of a divorce can persist long after the emotional and practical issues have been resolved. For the owners of small, closely held companies, the effects can be felt more severely than usual. In many of these cases, the business itself may be the largest marital asset and a major source of the couple's income. Therefore, they may worry that the future of the business is at stake, especially when the couple cannot continue to work as partners after the divorce.

Business owners can take steps to find a solution that can protect their companies while reflecting a fair settlement in the divorce. As Arizona is a community property state, there is a strong presumption that all of the assets gained during the marriage belong equally to both partners. This is true even if one partner focused much more closely on the business than the other. When a business was launched before a marriage, it may not be considered entirely marital property, but its increase in value will almost always be handled as part of the marital estate.

When women in Arizona decide to divorce, they may need to take special care to protect their finances. While the overall role of women in household finances has changed significantly over the years, many wives still know less than their husbands about the state of household finances, the scope of family assets or the investments that they hold. When 40 to 50% of marriages end in divorce, it is particularly important that women remain aware of their collective finances in order to protect themselves financially in the event of a divorce.

There are some key documents that can help people make decisions about filing for divorce and negotiating a settlement. These include annual tax returns, statements of net worth and lifestyle analyses. Unfortunately, many wives sign off each year on the family tax returns without fully understanding the information contained therein. These documents, including 1099, W-2 and K-1 forms, can provide detailed information about each spouse's income from employment as well as investment income, capital gains and business income. Tax returns can be particularly important when a family business is involved.