Many divorces are caused, at least in part, by money troubles. While there is often substantial attention given to dividing assets like bank accounts and property, many couples also have to determine how debts will be divided.
Usually, if the parties agree to a financial arrangement to divide the debt, a court will accept it. However, if the parties cannot agree, they will be bound by the court’s decision. A family law attorney can assist in negotiations, protecting your interests and possibly keeping the parties in control of their own property division.
Debt Belongs to Both Spouses
Because California is a community property state, debt incurred during the course of the marriage will belong to both spouses jointly. This will likely be the case unless the spouses have a prenup in place.
This means that even debt on credits cards that are only in one spouse’s name will be classified as community debt so long as the debt was acquired during the marriage. Debt acquired after the parties separate will be separate debt. Additionally, income tax debt will be considered the debt of both spouses.
The Goal of Property Division
Typically, a court will seek to split debts and assets equally between the parties. This does not mean each and every asset will be divided equally. Rather, the court will seek to divide all assets so that the sum each spouse walks away with is equal.
The debt of a marriage also must be divided evenly and can be used to “even out” one spouse’s portion of the community. For example, a spouse may get a car or boat that is owned outright and may also be responsible for the balance on credit cards.
When the value of community debts is greater than the community assets, a court may not seek to equally divide the community property. In this case, the court may seek to assign debts to the party who is in the best financial situation to pay them off.
Call a San Jose Debt Division Lawyer
If you are concerned about the amount of debt in your community, an attorney can help. Divorce lawyers have seen numerous ways to divide debt and assets and may be able to offer a variety of solutions that you and your spouse may not be aware of. Contact the accomplished San Jose, CA community property attorney at Dominion Law Group, LLP at 408-288-5592 today.