Dividing debt in a divorce

The American Psychological Association reports that 40 to 50% of marriages in the US end in divorce. These are statistics that we hear often, but it’s important to keep in mind that there are certain things divorcing couples should prepare for. Property division often entails dividing debt that was incurred during the marriage. Ideally, both parties would walk away with the debt they created or the debts that are in their name, however, this is not always the case. If you’re getting a divorce in California, here are some important things to keep in mind.

Legal responsibility for debt

California is a community property state, which means debt incurred during the marriage isn’t automatically assigned to the spouse that created the debt. Both parties may be responsible for all property division processes, including marital debts, even if one spouse created a debt without the other spouse’s knowledge.

In equitable distribution states, the court will assign the debt liability based on the spouse who created the debt. Generally, the debt belongs to the spouse whose name is associated with the debt.

Determining debt distribution before divorce

When it comes to property division, spouses should try to work out debt liability by determining which spouse is responsible for which debts. This will likely be a complicated process and requires both spouses to work together to come up with a solution. When it comes to credit card debt, it may be necessary to consolidate credit card balances with other loans or transferring the balance to another credit card.

Consulting with an experienced family law attorney could help you properly divide your debt during a divorce so you can organize your funds and start preparing for your financial future.

Share On


Navigating The Breakup:

A Complete Guide To Divorce For Silicon Valley Founders & Executives

Have more questions about divorce? Check out our Divorce Q&A.