When you go through a divorce in California, you face the challenge of dividing debts. The way the court divides debts can affect your financial stability after the divorce. California law follows community property principles, meaning most debts accumulated during the marriage are shared equally between spouses. However, exceptions exist, and the division process depends on different factors.
Community property and debts
California operates under a community property system. It considers assets and debts acquired during the marriage as jointly owned. For example, if one spouse takes out a loan or incurs credit card debt during the marriage, both spouses usually share that debt. The division typically follows an equal split, meaning both spouses are responsible for 50% of the debt.
Not all debts are treated equally. The type of debt and the circumstances surrounding its creation influence how the court divides it. For example, a debt that one spouse accumulates before the marriage or after separation might be separate, meaning that spouse would take full responsibility for it.
Debt responsibility after divorce
After the divorce, the court generally orders how the debts are to be paid. But this order doesn’t necessarily mean both spouses share responsibility equally. The court can assign more debt to one spouse if they benefited from it more, like if they used the loan funds for their personal needs. The court also considers each spouse’s financial situation and ability to pay when dividing debt.
Exceptions to community property division
While most debts fall under community property, some exceptions apply. Debts incurred before the marriage or after separation usually count as separate debts. In these cases, the spouse who took on the debt is generally responsible for it.
Debts related to child or spousal support, or those involving fraud or intentional wrongdoing, may get handled differently by the court.
How to protect yourself from debt division issues
You should keep clear records of all debts and assets throughout the marriage to avoid complications. Track any personal debts or separate accounts, as these might not get divided in the divorce. You might also want to consult with a financial professional or mediator to ensure a fair and appropriate debt division process.
By staying informed and prepared, you can confidently navigate the division of debts and protect your financial future.