Who Gets the Debt in a Divorce?

Within a marriage, assets include everything the couple jointly owns. This applies to real estate, savings, and even debt. When discussing property division in a divorce, you must consider that all property is divided. This means debt is divided as well.

To understand who receives debt after the divorce, you must understand how California courts divide assets.

Community Property Division

California has a reputation for being on the cutting edge of progressive law and politics. Knowing this, it is surprising to learn that it uses a traditional property division model. In a divorce, California attempts to divide assets equally. Each spouse should receive 50% of the overall “community property.” Only nine states currently use this model.

Community property is also called “marital property” or “marital assets.” Essentially, this is property that each spouse owns equally. Legal definitions always have exceptions, but basically, any property that is acquired during the marriage is owned by each spouse. If you buy a beloved childhood toy on eBay, and you’re married, your spouse technically owns 50% of that toy.

Debt acquired during the marriage is jointly owned as well. When you get divorced in California, you should be left with half the value of the community property. Achieving that equal split may be complicated. Maybe one partner is given all the debt, but they are also given more property, evening out the martial assets’ value. Perhaps the court simply splits the debt evenly and handles the tangible property separately. The point is this: In some capacity, you will share the overall marital debt with your spouse evenly.

Wasteful Dissipation

An accusation of wrongdoing is one of the few ways to gain more than 50% of the marital assets. For instance, if the court believes you were abusive, they may award more property to your spouse. In this way, a divorce court acts like a civil court, awarding compensation to an injured party. Accusations of wasteful dissipation could also result in an uneven split.

Knowing that their spouse could gain half the marital assets, some people purposely waste money before the divorce. This leaves their spouse with less to split. This act is called wasteful dissipation. It is the act of willfully wasting marital assets, keeping your spouse from benefitting from equal property division.

A spouse could also be accused of wasting assets within the marriage. This accusation is tricky and harder to prove, but doing so is still possible. Essentially, wasteful dissipation within a marriage means that one spouse was frivolously, secretively spending money. If they had a gambling problem, spending tons of money and keeping this addiction from their spouse, they could be accused of wasteful dissipation. Similarly, they could be accused of spending lavishly on a secretive, extramarital affair.

If the court believes one spouse is guilty of wasteful dissipation, it can award a greater amount of asset to the other spouse. This could also directly affect debt division. The guilty party could be forced to take on more of the debt or possibly all of it, creating a wider distribution of assets than an even, 50/50 split.

Working With an Attorney

If there is debt in the marriage, you probably can’t escape taking on some of it after the divorce. You can, however, make pleas to take on less.

Even in an equal division model, you can claim “entitlement” of assets. This means that you deserve to keep certain property. If you significantly contributed to the asset, you may be able to keep it. For instance, if you helped your spouse’s business become successful, you may be entitled to keep a portion of it post-divorce.

Remember, however, that any property you keep will come with a price. In a community property model, you will owe your spouse half the value of any assets you retain.

You can make similar please regarding debt, only in reverse. Rather than arguing for keeping the asset, you can argue that debt should go directly to your spouse. Perhaps they racked up the debt without your consent. Maybe that’s the major reason for the divorce. If you can argue that you contributed to an asset and are therefore allowed you keep it, you can also argue that you did not contribute to the debt, and you should not be held responsible for helping to pay it off.

For questions or concerns about debt in a divorce, contact our office. We can offer you a consultation, and we may be able to answer any queries you have. You can call us at (949) 565-4158 or contact us online.