Determining who is responsible for paying off debt acquired in a marriage can be a challenge for couples in California getting a divorce. Financial matters like this are one of the biggest reasons that a divorce can turn ugly. Our Murrieta divorce attorney explains how California family law courts determine how debt is split in a divorce.
What is Considered Debt?
All debt that was acquired during the marriage is considered to be community debt. Debts can include a large variety of things, including:
- Credit cards
- Car loans
- Mortgages
- Lines of credits
- Other consumer loans
Who is Responsible for Paying Off Debt?
California is a community property state, which means any property the couple acquired while married is divided equally between spouses in a divorce. How does this relate to debt?
Well, debt is considered community property in California, meaning any debt, acquired by either spouse during the marriage, is both parties' responsibility. Furthermore, any debt incurred prior to the marriage is the responsibility of that person. During the divorce process, only community property is divided.
How Does the Court Divide Debt?
During a California divorce, the court aims to split debt and property in a manner that leaves each party with a similar value's worth of property. Therefore, debt can be used to balance out how much property each party gets in the divorce.
For example, one spouse receives a high-dollar asset like the family home, leaving the other spouse with far less property in terms of monetary value. Then the court may assign debt responsibility to the spouse with more property to ensure each person is getting equal amounts of property.
Essentially, both parties should have an equal net share of assets. To determine what an equal net share is, there is a simple formula that can be followed. Take the joint value of all of the couple's community property and subtract the amount of debt owed. The result is then divided between the parties. This final number is how much each couple will get in the divorce.
Contact a Murrieta Property Division Lawyer
To avoid potential problems with dividing debt in your divorce, contact our skilled divorce attorney at Law Offices of Michael D. Iverson, APC. We can help you navigate the process of dividing property and debt so you can avoid making unnecessary or costly mistakes.
Call us today at (951) 418-2770 to set up an appointment to discuss your case.