Debt Division
In California divorces, we often hear about the distribution of property held by the spouses, but what is less often discussed – and yet just as often important if not more so – is the division of debt between spouses. Because many couples actually carry more debt than they have assets, deciding which spouse will be responsible for paying off which portion of the debt after a divorce can have often enormous financial consequences for both spouses for years to come.
How Debt is Divided in California Divorce
Some of the more common types of debts that must be divided in a California divorce include:
- Credit card debt
- Mortgage payments on real estate
- Car loans
- Student loan debt and educational loans
- Short-term bank loans
It is important to understand that the spouse whose name the debt is in is NOT necessarily the spouse that will be solely required to pay off the debt following a divorce. Most debts that are acquired during a marriage by either spouse are considered the debt of both spouses for purposes of the divorce. Thus, if your spouse racked up $30,000 in credit card debt for his or her own purchases, and the credit card was in that spouse’s name only, both spouses may still be responsible for paying the debt per a court order in the divorce.
A number of exceptions to this general rule may apply, including where one spouse took on educational/student loan debt, which will be treated as debt belonging to that spouse alone following a divorce. In addition, any debt accrued by either spouse either before the marriage or after the date the couple decided to separate will be the obligation of that spouse alone. Because of this, it is important to speak to a family law attorney as soon as possible after considering divorce to prevent your spouse from using community assets to pay down debts that should belong solely to that spouse.
How We Help Our California Divorce Clients
When you work our family law attorneys, we will comprehensively assess your financial situation as well as that of your spouse to make sure that you are not saddled with any debt properly belonging to the other spouse, and will present all legal arguments to the court in your favor. We will also prevent your spouse from taking actions detrimental to your interests such as using community property to pay down separate debt or falsely claiming separate debt belongs to you as well.
Finally, we will also work to efficiently and economically resolve all aspects of your divorce by negotiating a beneficial agreement with the other spouse as well as creditors whenever possible to minimize the financial and emotional stress in your life.
California Family Law Attorneys Winning Results in Your Debt Division Matters
The family law attorneys at The Law Offices of Omar Gastelum and Associates, APLC, with offices in Los Angeles and Newport Beach, have many years of experience representing spouses from all backgrounds through all stages of divorce, and are dedicated to obtaining the best possible outcomes for their clients. Whether you are considering divorce, have been served with divorce papers, or are already deep into the divorce process, contact our office today to schedule a consultation regarding any questions or concerns about debt division or other aspects of divorce.
