Dealing with Ongoing Financial Obligations During a Divorce
California Divorce, Debt, Mediation, Property Division

Ongoing Financial Obligations During a Divorce

Divorce is rarely simple, and one of the most challenging aspects is managing ongoing financial obligations while your case works its way through the legal system. In California, divorce proceedings can take months or even years to finalize, and during that time, bills don’t stop coming. Mortgages, car payments, credit cards, and children’s expenses continue to demand attention, often creating stress and conflict between separating spouses.

Common Ongoing Financial Obligations

Understanding how to handle these shared financial responsibilities during divorce is crucial for protecting your credit, maintaining stability for your children, and positioning yourself for a fair settlement. At The Law Offices of Judy L. Burger, we help clients navigate these complex financial waters with clarity and strategic planning.

Mortgage and Housing Costs

For most couples, the family home represents their largest shared financial obligation. During a divorce, questions arise about who should pay the mortgage, property taxes, homeowners’ insurance, and maintenance costs. If one spouse moves out, should they still contribute? What happens if the remaining spouse can’t afford the full payment alone? These questions become even more complicated when home equity is a significant marital asset that will eventually be divided.

Credit Card Debt

Credit cards opened during marriage are typically considered community debt in California, regardless of whose name appears on the account. During divorce proceedings, new charges may accumulate, and existing balances may continue to accrue interest. Disputes often arise about who should pay for which cards, especially when one spouse believes the other is spending irresponsibly.

Auto Loans and Leases

Vehicle payments present unique challenges when spouses separate. The person driving the car isn’t always the person whose name is on the loan. If you’re making payments on a vehicle your spouse is using, or vice versa, this creates an ongoing source of financial tension and potential leverage in negotiations.

Children’s Expenses

Even before formal child support orders are established, children need food, clothing, medical care, childcare, and educational expenses. Parents must figure out how to share these costs fairly while living separately, often with reduced household incomes due to the expenses of maintaining two homes.

Utilities and Services

Phone plans, internet, streaming services, insurance policies, and utility bills often remain in one person’s name while both spouses are benefiting from them. Separating these accounts and determining who pays what during the divorce process requires careful coordination.

Spousal Support Obligations

In some cases, temporary spousal support may be ordered while the divorce is pending, creating a new financial obligation that must be met regardless of other financial pressures.

How Ongoing Financial Obligations Complicate Divorce

How can these expenses complicate matters if not handled properly?

Credit Score Impact

When financial obligations aren’t met during divorce, both spouses’ credit scores can suffer, even if only one person stopped making payments. A joint mortgage or credit card in both names means both parties are legally responsible, and missed payments appear on both credit reports.

Leverage and Power Imbalances

The spouse who controls the finances or earns more income may have significant leverage during divorce negotiations. They might threaten to stop paying certain obligations to pressure the other spouse into accepting unfavorable terms.

Documentation Challenges

Tracking who paid what during the separation period becomes critical for property division and reimbursement claims. Without clear records, disputes arise about whether certain payments should be credited against the final settlement.

Emotional Decision-Making

Financial stress during divorce often leads to poor decisions made out of anger, fear, or desperation. One spouse might max out credit cards, stop paying bills out of spite, or make large purchases to “get their share” before assets are divided.

Temporary Orders Delays

It can take weeks or months to get temporary orders in place addressing financial obligations. During this gap, couples must somehow figure out payment arrangements on their own, often without clear legal guidance.

Practical Advice for Managing Financial Obligations

Attorney Judy Burger has vast experience helping divorcing couples through these murky financial waters. Here are her top recommendations:

  1. Document Everything: Keep meticulous records of every payment you make, including screenshots, bank statements, and receipts. Note the date, amount, and purpose of each payment. This documentation protects you if disputes arise over who paid what during the divorce.
  2. Communicate in Writing: Discuss financial matters with your spouse via email or text message whenever possible. Written communication creates a clear record and reduces misunderstandings about payment agreements.
  3. Open Separate Accounts Immediately: If you haven’t already, open individual bank accounts and credit cards in your name only. Begin redirecting your income to your separate account. This prevents your spouse from accessing or depleting funds you’ll need for living expenses and legal fees.
  4. Request Temporary Orders Quickly: Don’t wait to seek temporary orders addressing financial obligations. These court orders can establish who pays what during the divorce process, providing structure and legal enforceability. Temporary support orders can also be established to help the lower-earning spouse meet basic needs.
  5. Continue Making Agreed-Upon Payments: Even if you’re angry with your spouse, continue making payments on joint obligations where possible. Defaulting on mortgages or loans hurts both of you and can complicate property division. Your attorney can seek reimbursement for payments you made on your spouse’s behalf.
  6. Prioritize Secured Debt: If you must choose which bills to pay, prioritize secured debts like mortgages and car loans. Defaulting on these can result in foreclosure or repossession, creating far more serious problems than late credit card payments.
  7. Consider Mediation for Financial Disputes: If you and your spouse can’t agree on how to handle ongoing obligations, mediation may help you reach temporary agreements without costly court battles.

How Judy Burger Can Help

As a California Certified Family Law Specialist, Judy L. Burger has dedicated her practice to helping clients through the financial complexities of divorce. This certification, held by fewer than 10% of California family law attorneys, reflects advanced knowledge and proven experience in family law matters.

Judy can help you obtain temporary orders quickly to establish clear financial obligations during your divorce. She’ll work to protect your credit and financial interests while building a strong case for fair property division. Her team can help you gather and organize financial documentation, identify hidden assets or debts, and develop strategies for managing obligations during the divorce process.

Whether through negotiation, mediation, or litigation, Judy Burger provides skilled representation focused on achieving outcomes that protect your financial future.

Divorce and Finances FAQs

Am I responsible for debts my spouse incurs after we separate?

In California, debts incurred after the date of separation are generally considered separate debt, belonging only to the spouse who incurred them. However, establishing the exact separation date can be complex, and some exceptions apply. Proper legal guidance is essential.

Can I stop paying the mortgage if I move out of the family home?

This depends on several factors, including who is named on the mortgage and what temporary orders are in place. Stopping payment can damage your credit and affect property division. Consult with an attorney before making this decision.

What happens if my spouse empties our joint bank account?

California law requires full financial disclosure and prohibits dissipating marital assets. If your spouse empties accounts, you may be entitled to reimbursement. Document the withdrawal and contact an attorney immediately.

How quickly can I get temporary spousal support?

Temporary support orders can typically be obtained within a few weeks to a couple of months of filing a request with the court. The timeline depends on court scheduling and whether your spouse contests the request.

Should we file taxes jointly during our divorce?

This depends on your specific situation. Filing jointly may provide tax benefits, but it also creates joint liability. Your attorney and tax professional should review your circumstances before you decide.

Protect Your Financial Future Today

Navigating financial obligations during divorce requires strategic planning and knowledgeable legal guidance. Don’t face these challenges alone or make costly mistakes that could affect your financial security for years to come.

Contact The Law Offices of Judy L. Burger today to schedule a consultation. With offices throughout California, Judy Burger and her team are ready to help you protect your interests and achieve a fair resolution. Call now to discuss your situation and learn how we can help you move forward with confidence and financial stability.

Top Tips for the Smoothest Property Division
California Divorce, Property Division

Top Tips for the Smoothest Property Division

Dividing property during a divorce can be one of the most challenging and potentially problematic aspects of the process. Disagreements and misunderstandings can lead to serious mistakes and costly court battles. However, with careful planning and guidance, you can achieve a fair and equitable property division.

California Certified Family Law Specialist Judy L. Burger offers ten essential tips to help you navigate property division smoothly.

Property Division Top 10 Tips

Property division is typically the most problematic aspect of any divorce, but it doesn’t have to be like that; get informed and equipped for negotiations with these simple tips.

1. Know What Property is Marital vs. Separate

Because California is a community property state, separate and marital property is handled differently during a divorce:

  • Marital Property: Generally includes assets and debts acquired during the marriage. Familiarize yourself with your state’s laws regarding marital property to understand what will be subject to division.
  • Separate Property: Typically includes assets owned before the marriage or received as gifts or inheritances during the marriage. Clearly identify what qualifies as separate property.

2. Create a Comprehensive Inventory

List all assets and liabilities, including real estate, bank accounts, investments, retirement accounts, vehicles, inheritances, and personal property. This inventory will serve as the foundation for discussions and negotiations. Be honest and thorough to avoid complications later.

3. Assess the Value of Your Property

Get accurate valuations for significant assets. Consider hiring professionals, such as appraisers or financial experts, to provide credible assessments of property values. Knowing exactly what your assets are worth will aid in fair negotiations.

4. Understand the Impact of Debts

Property division is not solely about assets; consider debts too. Outstanding mortgages, credit card balances, and loans must also be addressed. Decide how to equitably divide the debts alongside the assets to avoid future financial burdens.

5. Prioritize Open Communication

Honest and respectful dialogue with your ex can lead to smoother negotiations. Discuss your priorities and concerns regarding property division directly. Aim for a collaborative approach rather than an adversarial one to create a more amicable environment.

6. Consider Mediation or Collaborative Law

If negotiations are challenging, consider using mediation or collaborative law services. These alternatives to traditional litigation can help both parties reach a mutually acceptable agreement with the support of professionals. Mediation can often lead to quicker resolutions and reduced stress.

7. Be Realistic with Your Expectations

Understand that compromise is often necessary in property division. Be willing to negotiate and prioritize what is most important to you, which can facilitate smoother discussions. Focus on equitable, not necessarily equal, division based on your specific circumstances.

8. Keep Emotion in Check

Property division can bring up strong emotions tied to relationships and memories. Strive to keep emotions separated from negotiations to make rational decisions. Take breaks if necessary and seek support from friends, family, or professionals to help manage stress.

9. Document Everything

Keep a record of all communications, agreements, and transactions regarding property division. This documentation can be invaluable if disputes arise later. Ensure that any agreements are formalized in writing and filed with the court if applicable.

10. Consult a CA Certified Family Law Specialist

Engage with CA Certified Family Law Specialist Judy Burger. She can provide valuable advice specific to your situation and ensure your rights are protected during the process. She can also help you understand state laws and guide you through negotiations and court proceedings if necessary.

Navigating the complexities of property division during a divorce doesn’t have to be overwhelming. By following these tips and seeking professional guidance throughout, you can work towards a fair resolution that sets the stage for your new beginning. Remember that clear communication and a focus on mutual interests can lead to a smoother process overall.

Contact The Law Offices of Judy L. Burger today to get seasoned guidance with your California divorce property division.

 

Splitting Liabilities in a CA Divorce
Property Division, California Divorce, Property Division

Splitting Liabilities in a CA Divorce

Dividing assets and liabilities in a California divorce can be problematic. Some elements of property division are not cut and dried, and many factors can influence how these arrangements are made. Many are concerned about getting their share of the assets from a marriage, but what happens to the debts?

Certified Family Law Specialist Judy L. Burger addresses the complexities involved in splitting liabilities in a CA divorce and how she can help.

Community Property and Debt

California operates under the community property principle, a system designed to ensure fairness. This means generally that, in the absence of other arrangements, both parties will receive an equal share of everything they acquired while married. Any separate property owned before the marriage or obtained after the separation remains the owner’s sole property, providing a sense of security in the process. There are complex exceptions to the division of property acquired during marriage or prior to marriage. 

However, the community property principle also applies to debt. Other arrangements can also come into play here, but typically, both parties in a divorce are responsible for half of the debt incurred  during the marriage.. Unfortunately, these issues are not always so black and white—they more often appear filled with grey areas.

A CA Property Division Lawyer like Judy Burger can work with you to help make the best decisions and arrangements.

Dividing Debt in a California Divorce

Property division can be confusing because of so many potential exceptions relating to community, separate, and co-mingled assets. Here are just a few potential examples:

  1. The divorcing couple’s marital debts are greater than the value of their community assets. A family law judge may assign more debt to the spouse earning more income.
  2. Some marital debt incurred by one spouse may be ruled as separate debt by the judge due to extenuating circumstances (like a cheating spouse using family money to buy gifts or fund travel for the affair).
  3. Student debt funded by marital income may be ruled as separate debt to the one benefitting from the education. One spouse may be directed to reimburse the other for a portion of the student debt already paid.

Complex situations like these are why you need an experienced CA property division lawyer on your team to help ensure you are treated fairly.

Date of Separation and Property Division

California is somewhat unique in that it uses the date of your separation to distinguish between most marital and separate property. Most other states use the official date of the divorce. Once both parties agree the marriage is over, they are considered to be leading separate lives (even if they still live together). From that moment, both are acquiring separate assets and debts.

This is a significant matter in your divorce, but agreeing on a specific date of separation can be tricky. The exact date can be argued from many points and affects which assets and debts are to be retained, split, or surrendered to the other spouse.

Get Experienced Help with CA Property Division

California Certified Family Law Specialist Judy Burger has the resources, working relationships, and expertise to help with the most complex property and debt divisions and business valuations. She harnesses the expertise of various professionals to help ascertain pertinent facts that influence who should be responsible for debts and how assets are to be divided.

Spouses and their attorneys cannot always be trusted to act fairly, so you need an experienced lawyer guarding your best interests. Decisions and arrangements made during these negotiations can affect your life and future. Contact Attorney Judy Burger at one of her eight offices conveniently located throughout California to schedule a consultation.

 

Epstein Credits and the Family Home
California Divorce

“Epstein” Credits and the Family Home

As a couple moves toward a divorce or legal separation, one potentially hotly contested issue involves what is known as “Epstein” credits. “Epstein” credits were named after the case in which they were first recognized, In Re Marriage of Epstein, which was decided by the California Supreme Court in 1979. These credits may be given to a party who pays community debt with separate property funds before a divorce or legal separation is final. If you are unfamiliar with the nature of community and separate property, please see our blog here.

The issue of Epstein credits often comes up when one party stays in the family residence with the children after the couple is separated. These credits are based on the notion that the family residence is community property and that both parties have a right to receive the benefit of that property until community assets and debt have been allocated by the court. The parties could benefit from the property in different ways: by staying there themselves, by renting it out, or by selling it. Therefore, when one spouse stays in the home, he or she is receiving a benefit and also depriving the other spouse of beneficial use of the property.

Epstein is not limited, however, to the family home. These credits may be requested any time preexisting community debt is paid with the separate property of one spouse. For that reason, they may apply to credit card debt, vehicle loans, and tax payments. However, the party requesting these credits must be able to show that a community debt was paid with his or her separate funds, such as income earned after the date the parties separated. When Epstein credits are awarded, the spouse who paid the community debt is entitled to be reimbursed out of community property assets.

Additionally, the right to Epstein credits may be extinguished under certain circumstances. For example, no Epstein credits will be awarded if the debt payment was intended as a gift, if the parties agreed that no reimbursement would be made, or if the payments were made in place of spousal support.

As you might imagine, both the date of separation and the nature of the debt involved are critical to a court’s decision of whether to award Epstein credits.

Because the legal issues in determining how property and debt are owned are significant, the assistance of an experienced divorce attorney can materially change the outcome of a divorce or separation matter. For these issues, you need an attorney with substantial experience in Northern California who will represent you aggressively. Please contact The Law Offices of Judy L. Burger at (415) 259-6636 to learn more.

How Is Debt Divided in California Divorces?
California Divorce

How Is Community Debt Divided in California Divorces?

Have you ever wondered how community debt is divided in a California divorce or legal separation? State law mandates that a couple’s community estate be divided “equally”, taking into account both assets and debt. It also provides several specific rules for dealing with debt.

Debt may be allocated as separate debt, community debt, or a combination of both. This determination is similar to the way community assets, or property, are handled. If you are not familiar with the concept of community property, please see our separate blog here.

As you might expect, separate debt is allocated to the person who incurred it. For example, under most circumstances, debt incurred by one of the parties either before or after the marriage will be the responsibility of that party. An additional category of separate debt about which many are unaware is debt incurred during the marriage that was “not incurred for the benefit of the community”. This type of debt is treated as the separate debt of the person who incurred it.

Community debt is handled differently. Under ideal circumstances, the parties agree on how they would like to allocate community debt; however, even if they do agree, the division of debt is not official until a judge enters a final order approving their agreement. If the parties cannot come to an agreement, the judge will do it for them.

The law provides additional rules to distinguish community from separate debt. Debt incurred after marriage but before separation is usually community debt, even if it is only in one spouse’s name. An example of this would be a credit card acquired during the marriage in the name of one spouse. The separate or community nature of debt incurred after separation but before judgment is entered depends on whether it was incurred for the “common necessaries of life of either spouse . . . or the children”. If the debt was for common necessaries, the court will allocate it according to the parties’ need and ability to pay it. If the expense was not for common necessaries, it will be allocated to the party who incurred the debt.

In allocating debt, there are additional considerations, called “reimbursements” or “credits”, that the court may assign due to payments made on the family home after separation, the use of the family home after separation, and payments made for education or training. These topics are discussed in separate blogs on our website.

If a couple’s community debts exceed its assets, the judge will assign excess debt according to what is just and reasonable. The court may consider the parties’ ability to pay, relative to one another, in making this determination.

The manner in which debt is allocated in a divorce or legal separation can impact you for the rest of your life. In hotly contested matters involving debt division, you need an attorney to protect your interests. The attorneys at the Law Offices of Judy L. Burger have extensive experience in property and debt division. Call today: (415) 293-8314.