Dividing Debt During Divorce
Divorce is a stressful process, and can be a tremendous burden on you and your family. The proceedings can become more taxing when it comes to dividing debt during divorce.
At our firm in Manhattan Beach, California, we care about making this process as easy and fair as possible for our clients. We at Rombro & Manley LLP understand how difficult divorce can be. We can guide you through negotiations and court hearings. Above all, we offer compassionate assistance, helping you achieve a fair division of debt.
Court Proceedings
In amicable divorces, spouses may be able to divide property and debts without going to court. However, in more contentious cases, the two parties often go to court to resolve their disputes. In court, the judge will divide debt 50/50.
The courts will try to make equitable divisions, considering the overall value of the debt. in question. In some cases, the courts may award more property to one spouse but also assign a larger portion of the debt.
Debt division can be especially complex when it comes to credit, mortgages or similar obligations. In some cases, the courts may make an order allowing one spouse to buy out the other’s share in the house and refinance. In other instances, a spouse may have to reimburse the other party for separate funds paid for a community home.
Like property, debt is considered either community or separate. Community debt is anything acquired during the marriage. Separate debt is anything one spouse acquired before marriage or after the date of separation.
Except in certain circumstances, a party’s student loans is that party’s separate debt, even if acquired during marriage.
Ensuring An Equitable Division
During the divorce process, debts are characterized as either community property or separate property and distributed accordingly. It is important to pay close attention to the characterization and distribution of debt, which can greatly impact one’s post-dissolution standard of living. Since the parties own each community property asset jointly, the job of the court is to divide the marital estate in an equal or 50-50 fashion. Many assets cannot be divided equally unless they are sold, and the proceeds divided. To avoid this, the court may award different assets of equal value to the parties.
It is important to be thorough when dividing debt. Everything should be switched over to the name of the person held accountable. Otherwise, the other spouse could be chased by collection agencies if the responsible party does not pay the bills.
Contact Us For More Information
At Rombro & Manley LLP, our lawyers are well-versed in the difficulties involved in property and debt division. We explain the details and consequences of each option to our clients, and work to secure a fair division so you can enjoy financial security. If you are going through a divorce, you deserve experienced, highly skilled legal guidance.
Call 310-545-1900 or contact us online to schedule your consultation with a skilled attorney.