Considering business debt in a divorce situation in Missouri

| Jun 25, 2020 | divorce

An entrepreneur whose marriage is hanging by a thread will likely want to safeguard his or her business in case of a marital split. Business people in Missouri who are heading for divorce may also be carrying some business debt and might need to understand how that debt figures into the divorce process. It could prove to be a contentious issue if not handled properly.

There are some things to consider for an entrepreneur who is divorcing. The first thing of which to be especially mindful is keeping personal and business finances separate. In other words, use assets and resources from a business for business purposes only. If that needs to be untangled due to a divorce situation, it could be problematic and costly. If a business has to be used as collateral for a loan or a home renovation, it’s crucial to document where those loan monies went and whether the business person personally paid back the loan or whether the business paid back the loan during the course of the marriage.

Also, the court may view an entrepreneur as having more funds than he or she actually might have because of a business and may determine support payments based on that. Much hinges on how expenses were paid during the marriage. A family court judge might look upon the total amount available to an entrepreneur to include any earnings that go back into the business and not into the pocket of the business owner. 

There are many things a Missouri entrepreneur needs to ponder when going through the divorce process. He or she might benefit from the experience of a divorce lawyer. An attorney will review a client’s particular situation and offer advice and guidance based on a client’s particular life circumstances.