Equitable Distribution (Property Settlement)

The following are some very general principles that relate to property settlement within a marriage. You are strongly encouraged to seek the advice of an attorney before you sign any type of domestic agreement or before you file for divorce. You may sign away some valuable property rights and/or you may lose your property rights if a divorce is granted before your property rights are settled.

In North Carolina property settlement is called Equitable Distribution. There is a presumption that there is a 50-50 split of marital property when you separate. The word presumption means that it is arguable that it should not be a 50-50 split. Marital property is anything that was bought/acquired during the term of the marriage with marital proceeds i.e. paychecks etc. What is not marital property is anything that was owned prior to the marriage that has remained separate property throughout the marriage, anything that is a gift solely to one of the parties that has remained separate property throughout the marriage and an inheritance that was given to solely one of the parties that has remained separate property throughout the marriage. Individual property can be made marital property if at some point during the marriage both names are put on the property. Included in property settlement are retirement, investments, stocks, bonds etc. acquired while married. If you are married for 10 years or more, you may be entitled to social security benefits from the other spouse even if they remarry. You may also be entitled to some military retirement depending on the length of the marriage and other factors.

Debts are divided as part of a property settlement. In other words, the court would presume that the debts should be split 50-50 although each party can argue why that should not be. If you are concerned about your credit history and how debts acquired during the marriage will affect you, you may want to get a copy of your credit history. Sole debts of another should not appear on your credit history. There are some marital exceptions to that such as for necessities i.e. medical bills etc. If there are joint credit cards/debts, they will appear on your credit history and the creditor will deem that both of you are responsible for those cards/debts. That does not mean that you cannot reach a written agreement otherwise concerning a joint debt with your spouse, but that is not binding on the credit provider. It is strongly suggested that you write each of the credit card companies where there is joint debt and indicate that you are no longer living with your spouse and will not longer be responsible for that card from that date forward. Request that the joint card be cancelled to ensure that no future debt is added. However, be aware that if it is a joint card, both parties will need to cancel the card.

If you are an authorized user on any credit cards, the debt can appear on your credit history. You will not usually have any legal liability with the company concerning that debt, but the creditor is allowed to put on your credit history the fact that you are an authorized user. If the spouse defaults on that card, that will also appear on your credit history. See our office for a discussion as to how your particular facts relate to the law.

• North Carolina Bar Association - Divorce and Separation (pdf)
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• Wake County Domestic Court Rules (pdf)

NC General Statutes

Here are some of the statutes as they relate to property settlement:

• Property Division - Equitable Distribution
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• Pension and Retirement Benefits
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• Procedures in Actions for Equitable Distribution
  03-24-05

This is general information about Equitable Distribution and is not intended to be a substitute for legal advice as it relates to your particular situation.Consult with our office to discuss how your particular facts relate to the law.