Debt: the other side of the coin in property division | Stacy Albelais, Attorney at Law
An important part of getting divorced in California is dividing the community property: figuring out what to do with the house, the car, the bank accounts and other valuable assets. The other part of property division is something that people in Riverside may not think about as much but is at least as important to get right: dividing up the debt.
Splitting up debt in a Riverside divorce
In California, community property refers to a married couple’s assets, but it also includes debts the couple acquired during the marriage. Often, these include things like the mortgage on the couple’s house, auto loans and credit card balances. For business owners, community debts might also include a business loan.
Community or separate debt?
As a community property state, California law generally requires community debts to be split 50/50. However, if one spouse can prove that the debt is separate property, the burden will go to the other spouse only. In many divorces, disagreements over what is and is not community property can take a while to resolve and may require a trial.
Trial is rarely necessary
Of course, few divorces end up going that far. The vast majority of divorcing couples settle out of court. An experienced divorce attorney can help you seek a reasonable solution to the property division question. One strategy is for one spouse to assume more of the debt in exchange for also keeping a larger share of the community property. Another common tactic people do is to require the spouse who is assuming a debt to refinance it (if it is a mortgage) or do a balance transfer to a new loan that is in that spouse’s name alone. That way, the creditor cannot pursue payment from the other spouse if the first spouse ever defaults on the loan.
Finding a creative, workable solution tailored to your individual needs is the job of any high-quality divorce attorney.
