Divorce can feel like a financial tug-of-war, especially when splitting debts. Many couples face tough questions: Who pays the credit card bills? What about the mortgage? How do courts decide who owes what?
If you’re undergoing a divorce in California, understanding how courts handle debt division can be valuable. This short blog will walk you through the basics of debt allocation during divorce, helping you prepare for what lies ahead.
Dividing debts in California
In California, part of the divorce process is the division of property and debts. A judge will issue a formal order, even if you split everything informally when you and your former spouse separated.
A judge can decide if you cannot determine how to allocate debts. Without a formal court order, any property or debts still belong to both you and your ex-spouse.
You will keep your separate debts, while courts will split community debts. Community debts are loans you took out after marriage but before the divorce, meaning you and your ex-spouse must pay them equally.
However, there are some exceptions to this rule. For example, a student loan or any money borrowed to pay for one spouse’s training will be considered like that spouse’s separate property.
The one who received the education will be responsible for the debt. If your former spouse helped pay off part of your student loan, a judge may reimburse them.
Protecting your finances after a divorce
Learning how California courts approach debt allocation can help you make informed decisions and protect your financial future. While every divorce is unique, being prepared and aware of your rights can significantly affect the outcome. If you feel overwhelmed or unsure about how to proceed, consider seeking professional legal advice.
