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How does California law divide debt during divorce?

On Behalf of | May 29, 2023 | Blog, Divorce

Property division is often a contentious part of divorce proceedings.

California is a community property state. Therefore, the court will divide all community property equally, including debts.

Defining community vs. separate debt in divorce

Any debt accumulated during the marriage is community debt. This is typically true even for debt under only one spouse’s name. For example, if one spouse has credit card debt in their name, both spouses may be responsible for half.

Debt classified as community property falls between the start of the marriage and the date of separation. Any debt acquired before the marriage and after separation is separate property. Sometimes the date of separation is difficult to determine.

In general, it refers to the day that either spouse has the subjective intent to end the legal marriage or takes definitive steps to demonstrate their intention to end it. Examples could include the day one spouse moves out or starts sleeping in a different room. Either way, it must be a final decision.

Debt as separate property during the marriage

Exceptions to the equal division rule exist. For example, you can sometimes argue an exception if the debt only benefited one spouse. Student loan debt is a common example because only the spouse with the education will continue to benefit from it. This may only be true if the other spouse did not significantly benefit the other spouse’s education during the marriage.

Every case is different, but when spouses can agree on the distribution of property, it will speed up the process.