Division of Debt

Why You Need a Divorce Lawyer in Mission Viejo

When you go through the process of divorce, you will be forced to consider a number of difficult issues. The main focus of many potential divorcees is whether they will be given a fair amount of the community property from the marriage. However, a very important factor to consider when filing for divorce is what will happen to the debt you and your spouse may have outstanding at the time that you file. Just like the assets and property that you own together, you also own that debt together. Therefore, as you separate the property obtained during your marriage, you will also be forced to divide the responsibility of any debts accrued during your marriage.

How Debt is Divided

Much like the division of positive property, the principle of community property division applies to the debts and mortgage owned by a couple. That means that any debts belonging to both spouses as a couple will generally be divided equally until they are paid off. However, unlike other types of community property, there are a few exceptions that may change how the debt is divided according to each spouse's income at the time of divorce.

The first task that must be undertaken when dividing a couple's debt will be to characterize the nature of debt. Again, much like the assets and property owned by the couple together, the debt will be divided into two categories based on the nature of its ownership and its origin:

  • Separate Debt: Any debt incurred by one spouse before the marriage or after the couple had separated will be attributed to that spouse alone. These are separate debts which do not require division because they belong to only one partner.
  • Community Debt: Generally speaking, California divorce law distinguishes any debt incurred during the course of the marriage as community debt, regardless of whether the transaction was a joint effort between spouses. This may mean that an outstanding balance on a credit card under one of the spouse's name is still the responsibility of the couple together if the charges on the card were made while the couple was still married. This also means that any tax debts that accumulated throughout the course of the marriage will also be considered the equal responsibility of both spouses, even if paying taxes was the task of only one of the partners.

One very important factor to consider when approaching the task of dividing debt is the date of separation. Many divorces do not occur abruptly but actually take time to progress. This means that it may be difficult to determine an actual date of separation because one partner may have already been living out of the house part-time before the couple decided to make it permanent. However, having an exact date is essential to the division of debt because it will determine the difference between community and separate debt.

What about mortgage payments?

One unique type of debt that many couples may face decisions concerning is the issue of mortgage payments. Mortgage is involved in the division of that actual family home because it was an endeavor likely taken by the couple together. Assuming that the house was bought by the couple using community assets (funds collected during the marriage), there are several ways that the mortgage may be divided.

The first method of dividing mortgage responsibility is simply to divide the payments equally among the two spouses. This is a difficult task because enforcing timely and full payment by each spouse may require regulation. However, what would likely result from this scenario is that the court orders the house be sold and the funds to be used to, first, pay off any outstanding debts on the house and then the net proceeds divided equally between the two spouses.

Another solution to this situation is that the court would allow one spouse to buy out the share of the other spouse's holdings in the house so that they would have sole ownership, and therefore sole responsibility, of the house and its value. The situation may become significantly more complicated if the house was bought and maintained using mixed funds, both separate and community. In that case, the court and attorneys would be forced to formulate a more complex plan of distribution.

Make sure your debts are fairly divided!

Dividing your debts fairly during divorce proceedings can very well become the most complicated task in the entire process. It is important that you protect yourself from being given an unfair or heavy amount of responsibility. The last thing you deserve when going through something difficult like a divorce is to have a great financial burden placed upon your shoulders.

If you contact The Hunter Law Group to assist you in the task of dividing your marriage's property and debt, you will quickly learn the benefits of having an experienced divorce attorney from Mission Viejo on your side. We understand how difficult a divorce can be and how complicated the division of debt may become. However, our priority is always to make sure that our clients come out of the process satisfied and adequately provided for as they enter this new phase in life. Call a Mission Viejo divorce attorney from our office to learn more.