Anyone who’s going through a divorce has several things that they have to consider. One of these is what’s going to happen to the marital estate. While many people automatically think about the marital assets, they may not realize that all marital debts also have to be divided.
California is a community property state, so most debts acquired during the marriage are considered shared, regardless of whose name is on the account. Some of the common debts that have to be included in property division are credit cards, mortgages, car loans and personal loans.
When do parties have to share responsibility for a debt?
Typically, the parties will have to share responsibility for any debt that was incurred between the wedding date and the date of separation. In most cases, debts from before the wedding aren’t considered community property. Instead, those are classified as separate property. The person who brought the debt into the marriage would usually be responsible for it. The same is true for debts that are racked up after the date of separation.
In some cases, it’s possible that even debts racked up between the date of marriage and the date of separation would be considered separate property. State law makes room for exceptions, such as debts related to financial misconduct. For example, if one spouse secretly took out a loan for gambling debts, the court may assign that debt solely to them.
How does the court divide debts?
Courts aim for an equal division of community property, which includes the debts. This doesn’t automatically mean that every debt is split in half. Instead, the judge will typically try to ensure that each party has an equal share of the marital estate based on the total value after debts and assets are accounted for.
Understanding the division of assets and debts in a California divorce can be complex. It may be beneficial to work with someone who knows your situation and can help you to understand how the laws will apply to you.