The end of your marriage does not release you from financial liability for debts you took together as a couple, commonly referred to as marital debts. Such debt can include mortgages, credit cards, car loans or other financial obligations incurred during the marriage.
Everyone will have their share of the marital debt to repay when you decide to part ways. In California, the division of such debt takes a similar approach to property division. Here is what you need to know.
Marital debt is equally divided between the spouses
State laws will apply if there is no valid and legally binding agreement like a prenup that outlines how debt will be split when you divorce. California is a community property state. Therefore, the marital estate, including the debts incurred as a couple, will be divided equally between you and your spouse upon divorce.
However, if the marital debt exceeds the community property, the court will divide the debt in a just and equitable manner. Your ability to repay is among the factors the court will consider in such a situation.
You are still answerable to joint debt
Creditors can still come after you for joint debt the court assigned to your ex if they default. The debt contract with the lender still stands despite the court’s directives that your spouse should pay the debt. The only way to deal with this is by revising the terms with the lender and getting your name out.
Protect your financial interests in a divorce
Divorce means a reorganization of your finances, and things can go wrong if you are not careful. Therefore, it is best to seek legal guidance on what to do to protect your interests and ensure you do not end up in a financially difficult position when the divorce concludes.