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Is your spouse creating false debts during a divorce?

On Behalf of | Jun 29, 2022 | Family Law |

If you’re going through a divorce, you know that you have to disclose all of your assets and debts to the court. The court then helps you and your spouse divide these between the two of you.

One thing you may be worried about is that your spouse is going to hide assets. People sometimes do this by creating false debts. Why do they do this and how does it work?

An excuse to lower asset levels

These false debts are usually just an excuse to reduce the apparent amount of assets that the person owns. What they’re trying to do is make it look like they have less money than they do so that they don’t have to split the full amount of that money with you during the divorce.

For example, say that you see your spouse has taken $50,000 out of your savings and given it to a friend. Clearly, it seems to you like they’re just trying to hide that $50,000. But you ask them about it, and what do they tell you?

They may have seen this coming, and they could already have an excuse ready. They may say that they owed their friend that $50,000. They never did, but they’ve invented this debt as an excuse for moving marital assets. 

A similar tactic is when a business owner creates false debts for their business, claiming that it costs more to run that business than it actually does. This is just another way to make the debt levels look higher than they are and to reduce the actual level of assets. 

If you are worried that your spouse is going to do this to keep the money from going to you, then you need to know what legal steps to take.