Marital debt plays a role in a lot of divorces, which can make things like property division a little more complicated. However, business debt tends to be a much bigger obstacle to clear. This not only has to do with debts associated with a business, but also how much a business owner takes for his or her income. Here are a few things Florida business owners may want to keep in mind when thinking about filing for divorce.
Keep track of loans
Taking out loans is common in business, but sometimes those funds do not go directly toward business. For example, someone might borrow against real estate owned by his or her business, then use the loan to pay for marital expenses. An owner might understandably feel as if that loan is marital property and should be divided accordingly. Unfortunately, a soon-to-be ex-spouse might argue that he or she was unaware of the loan or how it was used, so the owner must be prepared to demonstrate that it did indeed pay for joint expenses.
Define your business’s cash flow
Paying off business debt can also put someone in a difficult position during divorce. This is because an owner might choose to take a smaller salary in order to redirect some of his or her business income toward paying off debt. The problem here is that the redirected money would have otherwise been income for the owner, and the court may consider it as part of the owner’s income. As such, he or she may have to pay spousal or child support based off the combined amounts.
Owning a business can be complicated enough as it is, and divorce does not make it any easier. Unfortunately, there are few people who are experts in both business and Florida family law. This is why many business owners find it helpful to speak with an experienced attorney who may be able to help guide them through the process.