In California family law cases, property division is often a topic for dispute. People will generally want to retain as much as possible and strive to reach what they believe is a fair resolution. What many people might forget is that debt will also be divided.
This can be a sticking point as people will generally want to limit their obligations. There are key facts to remember such as what type of debt it is, who is legally obligated to pay it and if there is room for negotiation with the other party and creditors.
People need to address debt during their case
During a marriage, people will purchase items they want and need. That could be a marital home, automobiles, furniture, clothes and more. If they are securing a mortgage for the property, getting an auto loan or using credit cards, that will lead to debt that will not be immediately cleared even in a divorce.
The sides could have an agreement between them that one person will pay the debt even if both are listed on the account. The company is not obligated to honor any agreement the parties have made between them. Legally, both are responsible for it.
In particularly contentious cases, one side might use a joint credit card to make purchases after the split. Even if the other side did not want to make those purchases or was wholly unaware of them, they are still responsible for it if they are named on the account. When a person who asserts they are not obligated to pay for a debt brings this up in court and gets a favorable ruling, the damage will have been done to their credit rating if there are late payments or a failure to pay at all.
Know the facts about debt when getting divorced
Couples can decide on their own how to deal with debt. Selling property is one option. They can make a trade or refinance so only one is responsible for the debt. Property division, financial considerations and who will be responsible is a common obstacle in reaching a divorce settlement.
For these cases, it is vital to know how the law handles property and debt and to be aware of the available options. Some couples are on reasonable terms and they can discuss a settlement without rancor. In others, they are engaged in significant dispute making it impossible to come to an agreement. Some are in the middle of these extremes. Regardless, knowing what can be done is imperative and people should be fully ready from the outset.