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How Are Debts Divided in a California Divorce?

How Are Debts Divided in a California Divorce?

Date: Aug 20, 2022
In: Divorce

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How Are Debts Divided in a California Divorce?

Divorce can be a difficult time for spouses, especially when they have financial concerns related to their divorce. Oftentimes, couples have questions regarding debt acquired during the marriage and who will be responsible for paying it off. California has specific guidelines for dividing debt during a divorce. At Miranda, Magden & Miranda, LLP., we are here to help California couples understand debt division and guide them through every step of the divorce process. 

What Is Meant by a Community Property State?

California is classified as a community property state, meaning that any debt that was acquired during the marriage can be owed by either spouse, regardless of who acquired it. If couples cannot agree on how they want to divide their debt, court intervention will be necessary. In most cases, unless a previous agreement was established before marriage, the court will divide debts equally between spouses. This does not necessarily mean that the court will equally divide the sum of all debts. For example, if a couple has a combined total of $20,000 in debt, the court may not give each spouse $10,000. They will analyze how the debt was acquired, what the debt is attributed to, and then decide how to split the debt in a way that is as equal as possible. In certain situations, depending on the value of the debts versus the assets, the court may allow for debts to be unevenly split if there is a valid reason to do so. 

What About My Debt I Had Before Marriage?

If a spouse had a debt that they brought into the marriage, they are responsible for this debt post-divorce. This is referred to as separate debt, meaning that these funds are not considered in the distribution of debt during the divorce process. Oftentimes, couples are confused about the debt that is acquired during the marriage and whose responsibility it becomes after divorce. Even if a spouse made individual purchases during the marriage, such as using a personal credit card to buy items, it is still considered both spouses’ responsibility because the debt was acquired during the marriage. An attorney at Miranda, Magden, & Miranda, LLP can help individuals distinguish between separate and community debt. 

Can My Spouse and I Just Divide Our Debt Ourselves?

Some couples can come to an agreement on how they want to split their debts. However, a judge must establish a legal order that specifies how the debt will be divided for there to be an enforceable order that could enforce the couples’ agreement. A couple can choose to inform the judge of how they want their debts to be divided if they have a preference. The judge can then approve the division of debt and establish a legal order. In many cases, however, couples have a difficult time dividing their debt and need the help of an attorney to guide them through the process. 

Contact Our Team Today

If you have questions about debt division in California divorces, contact our team today. We are more than happy to assist with all of your legal needs. 

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