How is Debt Divided During a Divorce in California?

How is Debt Divided During a Divorce in California?

During property division in a divorce, it can feel like a land-grab for desirable assets and property. Neither spouse will be eager to claim debt, though. When it comes to debt division, it can feel like everyone loses, but it must be done for the divorce to eventually finalize.

Is the Debt Community or Separate?

Just like with any other piece of property in a divorce, the court will first try to determine if a piece of debt is community or separate. Community debt is any form of debt accrued during the marriage by both spouses, or for both spouses’ benefit. Separate debt is debt that preexisted the marriage and only belonged to one spouse.

Separate debt can be comparatively easy to assign. Unless there are some highly convincing arguments otherwise, the court will most likely give the separate debt to the original owner. Indeed, separate debt might not even be eligible for court review and simply go straight to its owner.

Community debt will need to be distributed either equitably or equally, depending on how the debt was created and why. In equitable debt division, each spouse will be given a “fairly calculated” percentage of the debt. For example, if one spouse wanted a new sports car and the other did not but it was placed on a shared credit line, any resulting debt might be divided 20-80%, with the latter being given to the spouse that insisted on buying it. Equal distribution of community debts fits more in line of many property division cases in California, and the court will simply try to divide the debt as close to 50-50% as possible, regardless of why it was accrued.

Handle Debt Division with a Family Lawyer

If you do not approach debt division carefully, you could be handed debt that really should not be your responsibility. To protect your finances and best interests, you should call 805.633.4999 and speak to me, Westlake Village divorce Attorney Jeffrey Graff of the Law Offices of Jeffrey S. Graff. For more than 30 years, I have been offering my legal services to people in need and helping steer them towards better tomorrows. Contact me today to learn more about debt division in California and how to begin your case.

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