The thought of dividing your assets in a divorce may be stressful. However, it is crucial to remember that you must divide your joint debts too. Splitting up your debt can be a complex process, so it is important to make decisions carefully.
If you are not careful, you may end up with an unfair amount of debt. Here are some tips for making it through the debt division process.
1. Remember you are responsible
California is a community property state, which means you are on the hook for any debt your spouse incurs during your marriage. This means you are equally responsible for any debt your spouse obtains, even if you are not on a particular loan or credit card. Unless you have your own prenuptial or postnuptial agreement that addresses the division of debts differently, the court sees you as jointly responsible for debt your spouse incurs while wed.
2. Keep track of expenses after you separate
If either of you incurs debt after you separate, (e.g. move out of the house or sleep in different rooms) the family court will generally view it as a separate debt. Usually, you do not need to worry about debt your soon-to-be ex racks up once the divorce process begins. It is vital to know the exact date of separation. From there, you must keep good records so you can prove what charges are yours and which ones are not.
3. Close joint accounts
One of the best ways to ensure you do not get stuck with extra debt after the divorce is shutting down all joint accounts. Canceling your joint credit cards will avoid the risk of any more debt accumulating. Once you close these accounts, consider filing the documentation with the court for evidence.
Thinking about what happens to debt after divorce can be scary, but you can avoid extra liability by following these guidelines.