Dividing Debt in a Divorce

A divorce can be a highly emotional and contentious proceeding. At McKinley, Conger, Jolley & Galarneau, LLP, our divorce attorneys aim to handle divorce proceedings as fairly as possible while making things easier for our clients. We look out for our client’s best interests and work to settle crucial issues in a way that is favorable to our client’s emotional and financial future.

For many, financial issues are one of the most challenging aspects of a divorce. It can be difficult to divide assets in a way that is fair to both parties, but how do you handle unpaid debt? Here, we discuss the typical process for dividing debt in a divorce so that our Sacramento, CA clients are not left to deal with unfair financial burdens.

Is Debt Individual or Joint?

As with assets, most states consider whether debt is individual or jointly shared before the court decides how it will be divided in a divorce. In many cases, if a spouse came into a marriage with debt (a student loan, for example), he or she will continue to be individually responsible for that debt after a divorce is settled.

Joint debt, which would be any debt that the couple took on together as a married couple, will likely be divided between the spouses in their divorce proceeding. Common sources of joint debt include mortgage, car loans, and credit cards.

It is important to note that California is a community property state, so even if one spouse took on debt and signed financial paperwork individually, the debt is considered community property, as long as the debt was taken on after the couple was married.

Dividing Shared Debt

If debt was taken on jointly by a married couple, the court will typically divide the debt equally between the spouses when they divorce. This doesn’t necessarily mean that each bill will be split down the middle. The court may assign certain debts to each spouse while ensuring that the financial debt assigned to each is equitable.

Another option for dividing debt is offsetting debt with assets. For example, if one spouse agrees to allow the other to keep more property, the spouse with the extra property may be assigned extra debt to offset the difference. Overall, the court typically aims to divide both shared assets and shared debt as equally as possible so that no spouse leaves the marriage with excess benefit or burden. Our Sacramento area attorneys will take all assets and debts into account when fighting to obtain a fair divorce settlement on your behalf.

What if My Ex Doesn’t Pay?

Unfortunately, there are cases when one spouse refuses to pay his or her share of assigned debts. Since the debt was originally taken on by both parties in the marriage, creditors may come after the other spouse if one fails to make payments.

In these cases, individuals can seek the court’s help in holding the other spouse responsible for assigned debts. The ex-spouse can be subpoenaed to appear in court and may even face fines or jail time.

Contact Our Attorneys

When you are going through a divorce, it is important to have an attorney on your side who understands the law and is ready to fight for your best interests.

To learn how the attorneys at McKinley, Conger, Jolley & Galarneau, LLP can be of assistance to you as you settle a divorce, contact us online at your earliest convenience, or call our Sacramento area practice at 209-477-8171 to set up a personal consultation.