3 Ways Lawyers Will Handle Hidden Debt During Divorce
During divorce proceedings, close scrutiny of the relationship often reveals a number of troubling secrets. Hidden debts are one of the most damaging secrets that are frequently confessed during the discovery period of the proceedings. With more than 40 percent of couples hiding money secrets from each other, this topic comes up often in the court system. In most situations, the rules surrounding community property or equitable distribution apply to the debt in question. Fortunately, if your spouse deceived you about a rather large financial obligation, and you are expected to split responsibility during the divorce, your lawyer can fight the equal assignment of liability for the debt. Here are three ways your lawyer may attempt to prevent the courts from listing you as responsible for that debt.
File Forms
Couples share the responsibility for paying taxes and penalties, as spelled out on each year's joint return. If your spouse quietly withdrew money from a retirement account or other taxed savings entity, you may end up owing the taxes on that amount despite not benefiting from the received funds.
In addition, you may end up responsible for an increased tax burden from your spouse's unpaid child support or student loans. This situation becomes even more troubling if your spouse handled the taxes and outright ignored the debt collection attempts by the Canada Revenue Agency. Luckily, your lawyer can file several suitable tax forms with the government in an attempt to release you from responsibility for that tax burden. Detailing this situation with court officials will also help split up debt during the divorce.
Attempt Mediation
Mediation gives your spouse a chance to admit fault and release you from responsibility for that debt. Many times, if your spouse claims you knew about the debt, the judge will rule that you have to pay it back.
You may be hesitant to attempt to talk it out with your spouse due to resentment about this situation. After all, if your spouse is willing to unfairly throw the burden of their debt on your shoulders during the divorce, it may not make any sense to try to appeal to their senses.
Despite that fair assumption, lawyers often have the verbal skills to appeal to the other party's sensibilities during the mediation sessions. For example, your lawyer may talk about legal repercussions related to fraudulently lying about debt assignment in order to encourage your spouse to claim the debt as his or her own. Calmly attend these appointments in an attempt to convince your spouse to do the right thing.
Prove Dishonesty
Your spouse may have planned to take out or acknowledge the debt prior to filing divorce in order to weasel out of paying half of the money owed. Alternatively, your spouse may have fraudulently signed your name on credit card applications or applied for a private loan in your name without your knowledge.
In order to demonstrate your lack of knowledge about the debt, your lawyer may have the signature on the applications compared to your own autograph. If you can prove either one of these scenarios, the judge assigned to your case will likely remove you from the debt immediately. In addition to acquiring full responsibility for the debt, your spouse could face legal repercussions for committing fraud against you. Penalties for fraudulent charges above $5,000 may include up to 10 years in jail, depending on your province.
Figuring Out A Plan Of Action
Although you may feel blindsided about this revelation by your spouse, take the time to develop a plan of action to fight against an equitable distribution or community property ruling. Help your lawyer acquire a full picture of the situation at hand by obtaining loan application paperwork or tax documents. If you cannot obtain the paperwork, your lawyer may issue a request on your behalf as an order from the court. Your lawyer will also need you to stay civil during mediation appointments and court proceedings. Always let your lawyer talk for you to keep the meetings progressing in a favorable manner. Once you obtain a fair ruling from the court, you can begin rebuilding your life anew.
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