Dividing Debt During Divorce: Who Gets Saddled With the Bills?

divorce related financeAs your CA divorce approaches, you’re likely thinking and preparing for the long-term outcomes and your financial health. Not surprisingly, one of the top questions we get is “what do I get to keep, and what will he/she get to take away?” 


This question usually applies to all shared income and assets such as real estate, investment accounts, and more. Just as importantly, people are often concerned about shared debt. Will they end up saddled with the bulk of the bills? What about in cases where the soon-to-be-ex was the primary culprit in racking up said debt?


For today’s post, were looking at how debt is treated during the asset division process of a CA divorce. 


Community Debt vs Separate Debt


In the state of California, assets and debt are treated in a similar manner. First, the court separate all assets and debts into two main categories: community and separate.


When looking at separate debt, the CA family law courts generally do not touch or distribute this, and it stays with the original owner even after the divorce. Any debt that was racked up before the marriage took place falls into the separate category. 


As for community debt, this is debt that is split equitably between both spouses. The CA family law courts consider any and all debt that was racked up during the marriage to fall under his category. So even if the ex took on the debt without your consent, note that you can still be financially responsible for his or her debt if it was accrued when you were married.


Assessing the Date of Separation


As the duration of the date is the biggest factor in determining whether a debt is separate or shared, the family law courts must work to assess the exact date of separation. In order to assess this, they look at the following two factors:


  1. The courts determine the exact date when one or both parties establish the intent to end the marriage clear.
  2. The date when the two separated physically, such as sleeping in rooms, moving to a different address, and more.


Once established, the courts can then more easily determine how all debts as well as assets are to be divided. Of course, the process is more involved and complicated than this quick overview, which is why you’ll want to ensure that you speak with and recruit a skilled divorce attorney in CA.