When it comes to divorce in California, there is a lot to think about. Couples will often fight over property division. Both want the marital assets, but the marital debts? Nobody wants to deal with those.
But marital debts are still considered property and must be split. California is a community property state, which means that most debts accumulated during the marriage are considered marital obligations, no matter whose name is on the account. For example, if your spouse took out a credit card during your marriage, the balance may still be considered your responsibility. This is true even if you never used it. Exceptions include debts taken on before marriage or after separation.
So, how is marital debt divided? When a divorce is finalized, the court assigns responsibility for debts as part of the property division. Judges generally try to split debts as fairly as possible (50/50), but factors such as income and financial stability can influence who takes on more. For example, a spouse who earns six figures is more likely to be awarded the bulk of the debt if the other spouse is making minimum wage.
Keep in mind, though, that the court order only governs you and your ex. If your name is still tied to a joint account, the creditor may come after you if your ex fails to pay. They will not care if you are divorced. They care about whose name is on the account, so even if your divorce decree says your ex must pay off the balance, late or missed payments can still hurt your credit.
Strategies for Managing Divorce Debt
Here are some ways to deal with debt in a divorce:
- Debt consolidation. One spouse may take out a personal loan to pay off joint cards, then take sole responsibility for that loan.
- Sell assets. Sometimes selling property is the only way to eliminate debts fairly.
- Negotiate with creditors. Creditors may agree to settlement terms if you explain your divorce situation.
- Use mediation. A mediator can help create a debt repayment plan that works for both spouses.
Practical Steps to Protect Yourself
After a divorce, you need to actively protect your credit. Here are some tips to help:
- Close or freeze joint accounts as soon as possible. This prevents new charges.
- Pay off shared debts before the divorce is finalized if you can, so neither spouse remains tied to the other’s financial behavior.
- Transfer balances to a card in one spouse’s name only, with court approval.
- Refinance loans (like car loans or mortgages) to remove one spouse’s liability.
- Monitor your credit report regularly to ensure no new accounts or delinquencies appear.
Contact Us Today
Divorces can get messy quickly, especially when money is involved. Everyone wants the assets, but nobody wants the debts.
Divorcing? Get the legal help you need from The Law Offices of Oliver Gutierrez in Redwood City. We know the laws and will work to give you the advantage you need at the negotiating table and in court. Need a Spanish-speaking family law attorney? Se habla español. Fill out the online form or call (650) 285-1673 to schedule a consultation.