DebtAmong other errors the Appellate Division, Second Department, addressed in its May 6, 2015 decision in Sawin v. Sawin, was the award to the wife of an $8,000 credit for her post-divorce action assumption of a $16,000 credit card debt. At trial, the wife testified that she incurred this debt over a two-year period starting approximately six months before the divorce action was commenced.

First, the Second Department noted that, generally, credit card debt incurred prior to the commencement of a matrimonial action constitutes marital debt and should be equally shared by the parties. However, debt incurred after the commencement of a matrimonial action typically is the responsibility of the party who incurred the debt.

Nonetheless, the appellate court noted that post-commencement debt incurred in connection with household living expenses and clothing for the parties’ children is debt that can be divided between the parties, even if incurred after the commencement of such an action. On the other hand, debt incurred for the purchase of personal items for one of the parties cannot be so divided.

Here, Putnam County Supreme Court former Justice Francis A. Nicolai noted that the expenses reflected in the credit card records were for food and clothing for the children and clothes for the plaintiff. However, as the record on appeal did not show what portion of the debt was incurred prior to the commencement of this action, or the amount of that debt which was incurred to meet the plaintiff’s personal, rather than marital, obligations, the issue was required to be remitted to the Supreme Court to make those findings and to make an award, if appropriate, consistent with such findings.

[Comment/Question: In this action, there were also awards of child support and maintenance. If such awards were made retroactive to commencement of the divorce action, should not such have overlapped, if not negated, any debt the wife incurred to meet the living expenses she faced during the action?]

The Second Department noted that Justice Nicolai had also erred when determining that the wife was entitled to a credit based upon a loan she took out against her 401(k) account. Justice Nicolai had equitably distributed the 401(k) account so that each party would receive 50% of the account balance as of the date of the commencement of this action, plus or minus gains or losses until the date of segregation.

The wife testified that she took the loan out after the date of the commencement of this action, from her distributive share of the account, intending to use the loan to pay for college expenses for the parties’ oldest child. However, the wife did not, in fact, use the loan proceeds to pay for such expenses.

As the money from the loan was not used to pay for college expenses or for marital benefit, it was not a marital debt subject to equitable distribution. Accordingly, the wife was not entitled to any credit for that loan.

Jason A. Advocate, of Advocate & Lichtenstein, LLP (John H. Hersh, former counsel on the brief), of Manhattan, represented the husband. Sarah R. Scigliano, of Stephen M. Santoro, Sr., P.C., of Carmel, represented the wife.