Who’s Responsible for Debt When Couples Get Divorced?
People often get so caught up in planning for who will get their assets in a divorce that they tend to overlook debt. However, most couples accumulate some type of debt during their marriages, and that requires negotiating who will pay it off. For instance, you and your spouse may share a car payment, mortgage, and credit card bills. Knowing who has to pay off these debts gives you a starting point for discussing this necessary part of your divorce.The experts from Divorce Options San Diego—experienced professionals who are transforming the divorce process with expert San Diego divorce mediation—offer these tips to aid you in deciding debt responsibility during your divorce.
Understanding Community Property and Debt
California is a community property state, which means anything you acquire during your marriage is considered to be shared, and this includes debt. When you make your divorce agreement, your debts are subtracted from your assets to determine your shared net worth. In cases where you cannot agree on who will pay off the debts, the judge may divide it down the middle. However, this is usually not the most ideal way to handle debt, since there are often other factors that influence who has the ability or expectation to pay for certain types of debt.
Talking About How Premarital Debt Is Handled
One of you may have entered the marriage with debt already in place. For instance, you might have had student or business loans that needed to be paid off. If these debts were paid off during the marriage, the spouse who didn’t incur them may be eligible for reimbursement for the portion of the loans he or she covered during the marriage. Keep in mind that any prenuptial agreements you had set up prior to your marriage may affect how premarital debts are handled as well.
Deciding if You Want to Be Responsible for a Greater Share
Divorce mediation gives you and your spouse the opportunity to decide who covers the different types of debt. However, this can sometimes get heated if you’ve had disagreements about how finances have been handled in the past. For instance, one of you may be upset about the other one having run up the credit card bills or making a large purchase. Try to set your differences aside during these negotiations. Your mediator can help you understand what’s legally expected from both of you while offering creative suggestions that can help you reach an agreement. For instance, you may take on the entire car payment if you’re keeping that vehicle, or one of you may need to buy out the other’s share of the mortgage if one of you is staying in the home.
Keeping Up with What Happens After the Divorce
Once you reach an agreement on the debt you have, the court will likely accept the agreement. Having your agreement approved is reassuring, since it means you now know what you need to pay. However, creditors can still come after you if your spouse stops paying his or her portion of a shared debt. If this happens, you may need to return to mediation to renegotiate how the debt is handled.
Even if your divorce involves intricate financial issues, you don’t have to spend a lot of money on lawyers. Every aspect—financial, legal, and practical—of amicable, respectful divorce agreements can be managed by Divorce Options San Diego’s trustworthy, experienced San Diego divorce mediators. Couples can rely on our thorough mediation process, one that’s so comprehensive there won’t be a need for attorneys to get involved. We perform all our services ourselves—we are the experts, so we don’t hire outside professionals. To find out more about how we can assist you with every part of the divorce process, call us today at (858) 281-2628.
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