When a couple decides to divorce, they will have to divide their assets and liabilities. Depending on their circumstances, they may have to contend with significant secured and unsecured debts during the process. Determining the most equitable way to divide debt during a California divorce can be complicated, and it’s essential to know the facts. Here is more on debts and California divorce.
California Community Property
California is a community property state. This means that outside of certain limited circumstances, a couple will equally share the assets and liabilities acquired during their marriage. During a divorce, the two will have to divide what they mutually own and owe.
Quasi-Community Property
A couple may also have assets that one or both acquired during the marriage while living outside of California. If the property would have been considered community property if it was acquired while the couple lived in California, it is considered to be quasi-community property. A couple’s quasi-community property is also subject to community property laws in a California divorce.
Separate Property
California Separate Property is property that a spouse acquired before marriage, after separation, or by gift or inheritance. Any income produced by the separate property is also generally considered a separate asset. However, some acts can turn separate property into community property. For instance, co-mingling separate funds with community funds in the same bank account or adding a spouse to a separate property title may create a community interest in a once separate asset.
Dividing Debts During a California Divorce
Generally speaking, community debts will be equally divided during a California divorce. However, some debts will not usually be split. For instance, student loans, spousal and child support from a prior relationship, certain criminal penalties, and some business liabilities are usually assigned to the debt-incurring party.
Secured debts, such as mortgages and auto loans, will ordinarily be assigned to the party who receives the asset. Unsecured debts, like those associated with credit cards, can be assigned equally or through negotiations. However, credit card companies will not care who has been assigned the debt. Therefore, if a card is in your name, even if your ex is told to pay for a certain balance, your name and credit may still be attached to the underlying debt.
Debts can be complicated during a California divorce, and it’s important to have the right information and advice during the process. The best way to help ensure that you understand how debts work and can be divided during a California divorce is by working with an experienced California divorce attorney.
Contact a California Family Law Attorney
The attorneys at the Law Offices of Judy L. Burger are experienced California divorce attorneys who can answer your questions about dividing debts and other matters. We assist clients along California’s Northern to Southern Coast, including San Francisco, Beverly Hills, Marin, San Jose, Gold River, San Diego, Santa Barbara, Ventura/Oxnard, and surrounding communities. Call us at 415-293-8314 to schedule a private appointment or visit our website.