Splitting Debts in a Divorce: Cerritos, California's Guidelines
Division of debt during a divorce can feel like an insurmountable burden, but you don't have to go it alone. If you're navigating a divorce in Cerritos and struggling to understand how debts will be allocated, you're not alone. With emotions running high, figuring out who's responsible for vehicle loans, mortgages, or credit card debt can feel like a tough second job. Yet, the answers to these questions can have a significant impact on your financial future.
At RM Law Group LLP, our seasoned Cerritos divorce attorneys are dedicated to helping you navigate the complexities surrounding debt division in a California divorce. We will guide you through the process, explain what community property means, and offer insights on steps you can take to safeguard yourself.
Community Property State – What's the Impact on Debt?
California is a community property state, which means most debts incurred during a marriage are considered joint responsibilities. Even if debt is only in one person's name, you could still be liable for half if your spouse racked up charges on a credit card during your union. This applies to multiple types of debt, including:- Credit card bills- Car loans- Mortgages- Personal loans- Healthcare expenses- Some business debts
However, there are exceptions, and the process can get more intricate as we delve further.
Not All Debts are Equal
While California begins by assuming equal division of debts, not all types of debt are treated identically. A judge may distribute debts differently based on key factors like:
Separate Debt
Some debts might be considered separate property, belonging solely to one spouse. Examples include:
- Debts incurred before the wedding
- Debts accrued after the separation
- Debts incurred due to personal misconduct like gambling
Student Loans
Debt over student loans is a common area of confusion. If one spouse took out loans during the marriage, the court will consider if the degree improved the couple's household income. If it did, the loan might be split between both spouses. If it didn't, a judge might assign the debt to the spouse who took it out.
Debt in One Spouse's Name
Just because a loan or credit card is under your spouse's name alone, it doesn't mean they're the only one responsible. If the debt was acquired during your marriage and used for shared expenses like grocery bills or rent, it's likely to be recognized as a joint responsibility.
The Family Home and Mortgage
If you and your spouse own a shared property, the mortgage is typically a common obligation. One of three scenarios usually unfolds:
- One spouse keeps the house and refinances their mortgage in their name
- The house undergoes sale, with the profits and debt being divided
- Both spouses jointly own the house for a specified period following the divorce (though this is less common)
A mortgage is a substantial financial responsibility, and how you manage it will impact the stability of your post-divorce life. Consequently, it's crucial that you discuss this matter in depth with your Cerritos divorce attorney.
Business Debts
If your spouse owned or ran a business during your marriage and took out business loans, those debts might be considered community obligations – even if you have no relation to the business. However, the court will judge whether the company benefitted the family and how funds were managed. If bookkeeping was unclear or income was hidden, a Cerritos divorce lawyer can help probe the matter and ensure you're not unduly burdened by debt.
How Do Judges Divide Debt in California Divorces?
If you and your spouse can't come to an agreement on how to split debts, a California judge will decide based on factors like:
- Whether the debt is community or separate
- When the debt was incurred
- How the debt was utilized (for household needs vs. individual gain)
- The earning capacity and income of each spouse
- The ability of each spouse to pay specific debts
In some instances, a judge may assign more debt to the spouse with more assets or higher income to maintain fairness.
Let Us Help You Navigate the Debt Maze
Dividing debts during a divorce can feel like an overwhelming undertaking. But with RM Law Group, LLP by your side, you don't have to do it alone. If you're facing a divorce in Cerritos and need answers about debt allocation, our skilled California divorce lawyers are here to support you. We understand the emotional turmoil associated with divorce and are committed to helping you make informed decisions to avoid financial uncertainty or being saddled with unfair debt.
Reach out to us today at 866-706-3160 or fill out our confidential contact form, and we'll be happy to address your concerns. Don't let debt stand in the way of starting a new life.
References:1. California Judicial Council – Family Law Form Interpretations – § 850, accessed on Dec 15, 2021.2. California Family Code § 770, accessed on Dec 15, 2021.3. California Courts Self-Help Center – Community Property Cases, accessed on Dec 15, 2021.
- Recognizing the complexities surrounding debt division in a California divorce, the seasoned Cerritos divorce attorneys at RM Law Group LLP can help guide you through the process, explains the concept of community property, and offers insights on safeguarding your finances, particularly in light of California being a community property state.
- In a divorce, debts incurred during a marriage are generally considered joint responsibilities, including various types of debt like credit card bills, car loans, mortgages, personal loans, healthcare expenses, and some business debts, but there are exceptions and different factors that can influence how these debts are allocated, such as separate debts, student loans, debts in one spouse's name, and the family home and mortgage.
