It’s easy to say that California is a community property state. However, the actual process of assigning property and debt is complicated, especially since people are more likely to think about dividing assets than dividing debts during a divorce. As an unhappy couple and their divorce lawyers sift through paperwork, they have to get the big picture of what the couple owes and who will pay.
Community property rules in California divorces. This legal theory means that most property acquired during a marriage are split between both parties, although there are exceptions. Debts accrued during marriage also belong to both spouses. Again, there may be some debts that don’t become community property.
Separate property and debts belong to one spouse. Usually, this is the person who brought it into the marriage or acquired it under certain circumstances during the marriage.
Sound complicated? It can be.
The Pitfalls and Things to Remember
Divorcing couples have to file financial disclosures to account for all assets and debts. The parties and their lawyers review the disclosures. Then, they make decisions about community and separate property or at least start negotiations. It’s not always easy to tell which category is appropriate.
Couples may face some or all of these common problems associated with dividing debts:
- Separate debt may have been mixed with community debt.
- Debt brought into the marriage as separate property may have increased during the marriage. The increase may be considered community debt.
- The couple may dispute their date of separation.
- Separate and community funds may be used to buy or maintain an asset, like a house.
Creditors rely on any agreements you or your spouse signed to obtain credit. How you split the debt doesn’t matter to them – they just want to get paid. Your credit score could suffer if a creditor holds you responsible for debt your ex-spouse failed to pay.
Also, without proper legal advice about dividing debts during a divorce, you may end up with more debt than your ex-spouse.
We Can Help When Dividing Debts and Assets During a Divorce.
Divorce cases are full of important and stressful issues. When you face property and debt division issues, look for experienced and knowledgeable advice.
Please call us at (415) 293-8314 to schedule a confidential appointment with one of our attorneys. Ms. Burger is a California Certified Family Law Specialist and founder of the Law Offices of Judy L. Burger. We represent clients in California’s Northern to Southern Coast, including San Francisco, Beverly Hills, Gold River, San Diego, Santa Barbara, Ventura/Oxnard, and surrounding communities.