Spouses sometimes come into a marriage with debt and also separately incur debt during the course of the marriage. Sometimes these liabilities are known by the non-incurring spouse, and sometimes they are not. The basic rule in California is that both parties are liable for any marital debt accumulated during the marriage but before separation. This is true whether or not one of the parties even knew it was incurred.
Debts owed by a party prior to marriage, known or not to the spouse, are not the debt of the non-incurring spouse. At the time of a divorce, community property—property accumulated during the marriage—is used to satisfy community debt. If there is not sufficient community property to satisfy the debt, then both parties are assigned a portion of the debt to be paid from their own funds post-divorce.
Couples can sign pre-nuptial or post-nuptial agreements that allow debts incurred during marriage to be treated as separate debts under certain circumstances. For example, they might agree that a debt incurred unilaterally, with only the incurring party’s income and liabilities qualifying for the debt, is the separate debt of that party. Such agreements must be drafted carefully to ensure they are legally defensible if that becomes necessary.
Debt incurred by a spouse after separation but before divorce is that spouse’s debt, and the other spouse is not liable from her separate funds or her share of community property. There is but one exception to this rule: when the debt is incurred to provide the “necessaries of life” for the debt-incurring spouse and the separation is not by formal agreement.
If you need assistance in a family law proceeding, you should consult with an experienced California lawyer, especially if there are significant questions of debt and property ownership. The attorneys at the Law Offices of Judy L. Burger will provide authoritative legal support tailored to your specific situation. Make the call today to learn how our attorneys can help: (415) 293-8314.
If your marriage is on the rocks and a divorce trial is looming, you may not be in a bargaining mood, especially if the subject is who will end up paying off the marital debts. It is important to understand how California treats debt incurred during the marriage and which factors a divorce court will consider in deciding who gets which debts.
California is a community property state, which generally means debts incurred by either spouse during the marriage belong equally to both spouses. Thus, it may not matter which spouse signed up for a credit card or bank loan. Both spouses may be liable for the balance owed.
Absent an agreement otherwise, the divorce court will decide how to divide the debts between the spouses. While the division of debts should be equitable under the law, it is important to remember that equitable does not always mean equal. Courts may assign a larger portion of the marital debt to one spouse based on a comparison of their circumstances, including earning potential and anticipated post-divorce net worth.
If spouses reach an agreement regarding the division of debt, the agreement must be reduced to writing and incorporated into your final judgment of divorce. Do so will make payment of debts by respective spouses enforceable by the other as a “family law money judgment.”
Going through a divorce is difficult enough without being forced to start over with an unfair portion of marital debt strapped to your back. Let us review your case and help you fight for an outcome that will give you the best chance for a brighter future.
At the Law Offices of Judy L. Burger, we will persistently pursue the best outcome possible for you in your divorce proceedings, including a fair apportionment of marital assets and debt. Judy L. Burger is known for her aggressive representation of clients in high conflict cases in and around the San Francisco Bay and Sacramento areas. If you are a spouse facing divorce, call us today to learn more about how we can help. Call (415)293-8314 in the San Francisco Bay area or (916)631-1935 in the Sacramento area, or contact us online via our confidential inquiry form.