Typically, debt that you acquired as a couple during a divorce is split, just as assets are. These include debts like credit card balances, mortgages, car loans and other debts accrued during the marriage. You can divide these debts, collectively known as marital debts, in several ways.
First, you may follow California community property laws, which require these debts to be divided equally. Alternatively, you can agree to divide marital debts differently than the equal division required by California law or follow through with a binding agreement like a prenup.
Creditors are not bound by a divorce decree
While the court may order one spouse to pay a certain debt, creditors are not bound by the divorce decree. If a debt is in both spouses’ names, creditors can still pursue both spouses for payment.
This means you may still be liable for joint debt, even if it is assigned to your spouse in the divorce. However, you can remove your name from such debt by contacting the creditor and negotiating a refinancing or transfer to your spouse.
Do not shoulder unnecessary debts
Debts acquired before the marriage or for personal interests are not subject to division during divorce. That said, it is not always easy to tell the difference between the two. There may be gray areas when defining marital and personal debts.
For instance, if you acquired debt before the marriage that was used for the benefit of the marriage or commingled with marital assets, it may be considered a marital debt subject to division.
Coupled with the potential impact on your credit score, the complexities of debt division in a divorce require a careful approach. Seeking experienced legal guidance can help protect your financial interests and safeguard your rights throughout the divorce process.
