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.

 

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What Must You Disclose about Your Assets and Liabilities in Your California Divorce Proceeding?

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What Must You Disclose about Your Assets and Liabilities in Your California Divorce Proceeding?
It is human nature to not want to disclose financial details with your soon-to-be-ex spouse. However, when you are involved in a legal proceeding for dissolution of marriage, legal separation, or nullity, it is mandatory that you do so. In fact, failing to make full and accurate disclosures can have severe consequences.

Under California law, spouses must act as “fiduciaries” to one another. This is an obligation of the highest order, requiring each spouse to deal with the other in “good faith” and not to take “unfair advantage” of the other. The fiduciary duty continues past the date of separation even while the divorce case is pending. The fiduciary duty also applies when it is time to make mandatory financial disclosures during the legal proceedings.

California law provides for the systematic disclosure of financial information between the spouses. Complete and accurate disclosure is important for several reasons:

  • It prevents the parties from dissipating assets before the court officially distributes them.
  • It helps to “ensure fair and sufficient child and spousal support awards.”
  • It helps the court divide the couple’s assets and liabilities.
  • It helps reduce acrimony between the parties.

The first disclosure is considered preliminary and consists of two main documents: the “Schedule of Debts and Assets” and the “income and expense declaration.” These documents are both basic inventories. The first document must list all actual or potential assets and liabilities, regardless of how they are titled or listed on paper. The second document must provide information about each party’s income and expenses. Both parties have an ongoing duty to update these documents immediately if there are any material changes.

The second disclosure is called final. The final disclosures provide much more detail about each party’s financial information. These documents must provide “all material facts and information” about assets, liabilities, community property, community obligations, and party income and expenses.

California laws include specific requirements that must be met in financial disclosures. If these requirements are not met, the court can impose monetary sanctions, including attorney’s fees and costs, and can hold the party in contempt of court. The attorneys at the Law Offices of Judy L. Burger have extensive experience in family law matters, including financial disclosures. Contact us today to learn how our attorneys can help you in your case: (415) 293-8314.