Debt Division in California Divorces: Learn How Debt is Looked at and Distributed
Posted on: April 26, 2023
Each state has its own regulations on how debt and property are divided during a divorce. California is a community property state. This means that unless a legitimate prenuptial agreement is in place, any debt or property acquired during the marriage is owned equally by both partners. Continue reading to find out how assets and liabilities are divided, after which you can get a free legal consultation from Law Office of Michael L. Fell.
What is Property According to California Divorce Law?
The first thing to comprehend is what the legal definition of property is. Included in this is “anything that can be bought and/or sold.” Anything with a monetary value can also be referred to as property. The following, for instance, are all examples of property types: Homes, boats, cars, RVs, clothes, furniture, bank accounts with money in them, pensions, businesses, patents, retirement accounts, life insurance with cash value, stocks, real estate, and pensions.
Debts Are Handled in the Same Manner as Property
As long as property was acquired during the marriage and was not a gift to one spouse personally, it belongs to both spouses. Likewise, if a debt was acquired during a marriage, it is shared by both spouses. Even if you had an oral or causal agreement in place, the judge will still hold you both accountable unless you had a formal agreement signed by both of you.
Knowing the Difference Between Separate and Community Property
California is a community property state, as are a number of other states. This means that regardless of who is listed on the title or who earned it, any property acquired during the marriage belongs to both parties. One thing is an exception: gifts or inheritances made to one spouse. No matter how accumulated, debt also belongs to both parties.
Even if you weren’t at all involved when your spouse applied for a credit card in just their name, you are still partially responsible for the debt. There is only one major exception: if you can demonstrate that your spouse used the money solely as a means of spite or retaliation. The judge may subsequently declare it to have been a “wasteful dissipation of marital assets,” in which case you might not be held accountable.
During the Divorce Your Separate Property Will Not Be Divided
During a divorce, separate property stays exactly that: separate. Included in this are gifts, inheritances, and property that one partner owned prior to the union. Even if someone buys something with their separate property, the thing they buy is still their separate property.
The good news is that you have a skilled family law attorney who can guide you through this procedure, even if it can be challenging. To get a free case review, call Law Office of Michael L. Fell at (949) 585-9055 right away.
