Although the division of assets takes the spotlight during a divorce, what happens with marital debt is equally important. This is the debt that a couple acquired during the duration of the marriage. When a couple goes separate ways, the marital debt must be divided between them.
If you are wondering how much debt you will end up with post-divorce, here is how the situation plays out in California.
Marital debts are divided equally
Under California’s community property laws, marital debt is shared equally. Therefore, each spouse will shoulder half the financial obligations after divorce. Remember, your separate debts are not part of the equation, only those acquired during the marriage.
The only scenario when the court may apportion different amounts to the spouses is if the marital debt exceeds the community property. In such situations, the court will divide the marital debt in a just and equitable manner by considering factors like a spouse’s ability to pay.
You may still be answerable for debts assigned to your spouse
Suppose your spouse defaults on a joint debt that the court assigned to them. Since you are still legally bound to repay such a debt, creditors can recover the debt from you. The divorce decree does not release you from debts you co-signed to or are jointly liable.
You can avoid liability by taking your name off the debt after engaging the creditor or having your ex-spouse refinance the debt in their name.
Take a proactive role in your divorce
It helps to be fully involved in your divorce to ensure you do not lose out or get a raw deal. If you do not know how everything works, especially during property and debt division, reach out for legal guidance on what to expect and how to protect your interests.