credit card debt divorce california, property debt division california divorce


Financial pressures often play a significant role in the breakdown of a marriage, but when a couple chooses to divorce those pressures do not simply disappear.  While family law in the State of California provides a fairly straight pathway for property division (including both assets and debts), walking that pathway is not always quite that simple.


What is Mine, What is Theirs, and What is ours?

The first and most crucial step in this journey is to determine who owns what, remembering that “ownership” applies to debts as well as to assets.  In California, the basic rule of thumb is that pre-existing debts you bring into your marriage you will take out of it; likewise, any debts you incur after your “date of separation” (more on that below) are solely your responsibility.  These debts are called “Separate Property.”  For instance, if before you get married you or your spouse purchase a home with a mortgage, or have a car loan, or if you are making child support payments from another previous marriage, those are separate debts and remain entirely yours or your spouse’s after the divorce or legal separation.


The focus then settles on those debts that are incurred between your date of marriage and date of separation.  Those debts are called “Community Property,” or debts that would rightly be considered jointly owned.  This is obvious when an item, for instance, a home mortgage, is in both of your names.  However, this also applies to those things which are in the name of only one spouse.  For instance, if you or your spouse have your own bank accounts that accrue credit card debt while you are married to each other, that is still considered a community debt in a California divorce.

Predictably, there are exceptions and areas of overlap between these categories.  For instance, if you purchased a home before you were married but your spouse lived with you in that home and contributed toward its mortgage payments and maintenance, then that home is considered to be Community Property.  On the other hand, student loans, even if taken while married, are considered to be Separate Property, and under California’s Family Code 2640 the other spouse can even request a reimbursement (called a “2640 reimbursement”) for any share they had in paying off that loan.


To summarize, then, the goal is to identify any debts, like credit card debt, that are “Community Property,” which, for the most part, are any that were incurred between your date of marriage and your date of separation.  Your date of marriage, of course, is simple enough to pinpoint.  Your date of separation is a bit more challenging.  It is not always simply the date one spouse leaves the home, nor is it necessarily the date of filing or service of divorce papers.  Rather, it is the date when one of the spouses officially (even if privately and only verbally) announces their intention to dissolve the marriage, and their actions and communications after that announcement show a consistent pattern of proceeding toward divorce.  Once that window is established, then each individual debt must be analyzed to make sure it does not fall into an exception category.


How are Community Debts, like credit card debt, Divided in Divorce in California?

California is one of a handful of states that operate on the principle of “equitable distribution.”  This simply means that the apportionment of the community property by the presiding judge will be on an equal basis between the spouses.


It is possible, though, for you and your spouse to develop your own division plan that may not be 50-50 but that you nevertheless both think is fair based on such things as projected income levels or childcare issues. If you do develop such a plan, it must be in writing and approved by the judge before it is considered enforceable.


To keep this process as simple and burdenless as possible, it is usually advisable to liquidate as many joint assets and pay off as many joint debts, like credit card debt, as possible before the divorce is finalized.  In some situations, for instance, when one spouse will continue living in the home, any debts associated with that home should be refinanced under the name of only that one spouse as early as possible.  If, however, it is necessary to maintain joint assets or debts after the divorce or legal separation, a system of strict accountability must be put in place to ensure that each party meets their financial obligations.


Let Us Help You.

Walking through a property debt division, credit card debt, or other assets within a divorce should never be something done alone.  You need a community around you, to support you and help set you up for your best possible new life. At the base of this support system is having a strong and experienced legal counsel, who can protect you and ensure your divorce does not lead to financial and emotional ruin.  We at Silva & Associates can provide you with that protection. We can help identify what is your Community Property and what is your and your spouse’s Separate Property.  We can help you negotiate with your spouse to develop an amicable and mutually agreeable division of financial property, which will enable you to avoid the time, expense, and emotional taxation of a court hearing or trial.  Furthermore, once the judge has approved the division, we can help ensure your spouse keeps their obligations.  We encourage you to reach out to us today and let our many years of experience work on your behalf.