Money Issues Can Exist After A Divorce


Divorce can be a traumatic and stressful experience, but if it is the right thing for a North Carolina couple, it can often be a relief once the split has occurred. Many marriages end because of financial issues, but these matters can survive a divorce. Shared and individual assets, child support, medical needs and everyday expenses must be addressed.

Unless there is a joint physical custody situation splitting the time each parent spends with their children equally, child support will likely be ordered. The non-custodial parent should know that a failure to comply with the order can lead to significant penalties.

A contentious issue in many contested divorces is property division. North Carolina courts follow the principle of equitable distribution, which means that in the absence of an agreement between the parties, a court will divide property in a manner that it deems to be fair. This does not necessarily mean equal, however, and in many cases neither party is satisfied with the result. Marital debts must be divided as well. It is important for each party to known that creditors do not care what the terms of a court order may say. If there is joint debt, then each party remains responsible until the debt is paid off or one party is taken off the loan.

Divorce has income tax consequences as well. For example, family law attorneys will remind their clients that alimony is considered income to the recipient and is deductible by the paying party. However, child support payments are neither income nor deductible. The property division phase may also bring tax consequences down the road. If one party later sells an asset received as part of the settlement, there may be significant capital gains taxes owed.