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California divorces and how to split the home

Since California is a community property state, one of the biggest complications when dividing assets can be determining what to do with the house. The only way to divide a house equally is to sell it and split the proceeds, but for many people this is not a workable solution because they want to remain in residence. Although more complicated, having one spouse move out and the other keep the house can work in some divorce cases and still allow for an equitable division of marital property, but there are steps people should take to protect their financial interests.

When couples in Oakland and Alameda divorce, any jointly owned debt does not uncouple along with the marriage. This means that if both peoples' names are on a loan, like a mortgage, then each of their credit reports will suffer if they miss a payment or default on the loan. If one person takes ownership of the house, that person should take sole responsibility for the mortgage. The only way to achieve this is to refinance.

Refinancing protects the spouse who moves out, but it could also benefit the person who stays in the house too. Without getting the debt of the house off the credit report, someone's debt-to-income ratio could inhibit his or her ability to qualify for a new mortgage, thus making it difficult to give up the former residence. One thing to consider, however, is that any purchases made while married become both spouses' property unless one person releases their interest by signing a quit claim deed.

Even though California law requires equitable asset distribution, spouses do not always agree on what is considered marital property. An attorney could assist people get their fair share of assets by identifying marital assets, helping to uncover hidden assets and fighting for their client's interest in court when necessary.

Source:, "How to Divide Your House in a Divorce", Scott Sheldon, July 09, 2014

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