Many California couples who are getting divorced in court understand that assets from the marriage will be split. However, it’s less commonly known that debt will be split among the spouses as well. Similar to other property obtained during the marriage, debt will have to be divided. Knowing how the debt might be divided is important for both parties.
If credit card debt accumulated during the marriage, the decision as to which spouse is responsible for it often hinges on whose name is on the account. An account in both names will likely wind up with debt shared between the two. If there was an individual credit card and the other spouse had no connection to it, the debt will belong to whomever’s name is on the account.
A mortgage is another major expense that must be considered. In many instances, a spouse who earns substantially more than the other will get the mortgage. In other cases, it may be given to the spouse who was granted custody of children. It should be noted that the spouse who takes the property will have to buy out the other’s equity in it. A way to avoid this is to sell the property.
Medical expenses can also be in dispute. Since California is a ‘community property” state, the debt will be shared. This may seem to be unfair to a spouse who did not accrue the debt. With these financial concerns to consider, it should be understood that divorce is not simply about ending the marriage and receiving an equitable division with both partners being satisfied. When going through a divorce, a spouse may seek legal advice when it comes to the division of marital estate.