Property division involving debts can be dicey
Posted in Property Division on July 12, 2018
The distribution of assets during divorce is oftentimes a source of major conflict between soon-to-be exes. However, property division involves more than simply the division of assets — it also involves the splitting of debts. Here is a look at how personal debt is handled during a divorce proceeding in California.
As a general rule of thumb, two divorcing spouses share responsibility for any debt that they accumulated together while married. However, even if just one of the spouses took on debt during the marriage, the other spouse may still be liable for this debt in California. After all, California is a community property state.
In community property states, assets that a couple acquired while married must be split equally between them. In the same manner, any unpaid balance on a credit card or a personal loan must be divided 50/50 during the divorce process. This is the opposite of what happens in an equitable distribution state, where a judge strives to split assets and debt in an equitable, or fair, manner based on various factors. Still, in California, if one of the parties took on debt before the wedding, only he or she is liable for this debt, as it is separate debt rather than joint debt.
Property division can understandably be overwhelming when large amounts of debt are at the center of a divorce proceeding. However, if two divorcing parties can find common ground in this area, they may be able to achieve a divorce settlement that reflects both of their wishes. An attorney can provide the direction needed to confidently and competently navigate the division of both assets and debt in California.