How Do I Fill Out My Net Worth Statement? – Part IV – Liabilities
A Statement of Net Worth is required to be exchanged in all contested divorce 
actions and in some uncontested divorce actions as well. In Part I I gave you some tips on how to fill out the “family data” and “expenses” section of the form. In Part II, I gave you my thoughts on completing the “income” section. In Part III, I took you through the “assets” portion of the form. In this post, we move on to completing the “liabilities” section of the form.
In completing the liabilities part of the net worth statement, you are trying to provide a snapshot of your debts (whether or not your spouse is also responsible for them). Debts come in several shapes and sizes and the form is designed to capture them all.
SOME SUGGESTIONS: When listing liabilities, make things easy for everyone. Review your checkbook and bank statements to jog your memory. Be on the lookout for automatic debits from your bank accounts and credit cards. Take the time to list the full legal name of the creditor (i.e., “Capital One VISA credit card”, not just “VISA”), the address of the creditor, the account number, in whose name the account is (Yours alone? You and your spouse?), the amount of the original debt and the date you purchased it (where the account was used to purchase a single item), the purpose of the purchase, the monthly payment (if applicable), and amount of the current debt as of the date you are using to complete your net worth statement (or amount in the account statement closest in time to that date). It’s a good idea to write “$[fill in amount of debt] as of [fill in the date from the statement you are using]”.
As with everything else you are referring to when completing your Net Worth Statement, save the documents you are relying on for later reference.
Now let’s take this section by section…
ACCOUNTS PAYABLE – this is where you list your bills with entities that you may have a private account with, such as with the butcher, the baker or the candlestick maker. It might also include rent (if you are behind in your payments) or any place where you “run a tab” like a country club, car service, drug store, exterminator, plumber, landscaper, medical bills not covered by insurance, etc. In each instance you want to list the owner of the account and the amount owed and what it was for.
NOTES PAYABLE – a “note” is a contract or promissory note where you agree to pay the amount borrowed in the future, either in a lump sum or over time. They include personal loans from a bank, a car loan, a boat loan, a loan from a family member or private person, and an “IOU”. It would also include regular expenses like a health club that bills your credit card every month over the course of a year. If you purchased something (e.g., a stove, oven, computer) from a store and you are making monthly payments to pay it off, you should list that here, and you should list the total amount outstanding for the entire purchase, not just the monthly payment. Also, if you own your own business and you personally borrowed or personally guaranteed a loan for that business, you should list it here and explain it was for the business. Again, list the lender, any account or contract number and the amount currently outstanding on the entire loan.
INSTALLMENT ACCOUNTS PAYABLE – this is where you list your credit cards, be they Visa, MasterCard, American Express, Discover or Macy’s. List them all and include account numbers and bank names. You should list the entire balance due on each card as of the date you are using to complete the net worth statement (or the date of the credit card statement closest to that date) and hang on to your statements. You should describe what the expenses were used for (e.g., vacation, household expenses, computer, etc.). In addition to credit cards, list any school loans for which you are liable here. These may include your own loans, and those you may have guaranteed for others, including your children.
BROKERS’ MARGIN ACCOUNTS – if you have an account with a stock broker or financial advisor in which you purchased stock or other securities “on margin” (i.e., you borrowed a portion of the funds to purchase the securities from the broker), you should list the account here.
MORTGAGES PAYABLE ON REAL ESTATE – if you have a mortgage on your home, vacation home, a home equity loan (sometimes called a “HELOC”), including loans for coops and condos, you should list them here. Grab (and save) your account statement; it should have all the information you need.
TAXES PAYABLE – if you owe taxes to the government list them here. However, don’t include current withholding taxes taken from your paycheck or taxes you owe for the current year unless you have been billed for it by the government. However, if you should have made one or more tax payments and failed to do so, list them here.
LOANS ON LIFE INSURANCE POLICIES – if you have borrowed money “against” one or more life insurance policies, list the amount you owe as well as information on the life insurance policy involved.
OTHER LIABILITIES – this is a catch-all section intended to include anything that doesn’t fit into the categories listed. Liabilities like loans against retirement accounts and gambling debts would go here, along with anything else that doesn’t fit nicely in one of the categories listed above.
FINAL THOUGHTS – don’t list the debts of your spouse if you haven’t co-signed for them. Let them do it on theirs. Do your homework and don’t be afraid to pick up the phone or go online to get up to the minute information. Sometimes it’s a pain to do, but don’t rely on your attorney or a paralegal to do this for you unless you are prepared to pay for their service (and sometimes the creditor will only give the information to you anyway).
In my next blog I’ll focus on filling out the final section of the Net Worth Statement.