Our Santa Rosa family law attorneys know that, at the end of the day, it’s the division of debt during a divorce that can be the central issue in most divorces involves the division of property. Who gets the house? Who is entitled to spousal support and how much support? What about the 401k? These are all extremely important issues to resolve during a divorce settlement, but in today’s economic climate, marital assets may not be a divorcing couple’s main concern. Instead, a divorcing couple may face the division of debt.
Division of Property:
The goal of the division of property is to come to an agreement where each side has a roughly equal “net” share. One method to determine equal net shares suggested by the Judicial Branch of California is to add up the value of all assets and then subtract the total amount of debt. This can be calculated by completing a Schedule of Assets and Debts, where all assets are listed with their fair market value, in addition to any debts. What is left after that calculation is the net value, which should be equally divided between spouses.
To achieve equality between spouses upon division, debt must be taken into special account. One way to divide debt to simply take the entire amount owed and divide it in half. It may seem like dividing the debt this way would be an easy way to split what is owed, however this may not be feasible in every case. One issue that arises is if the debt is on a credit card, the people to whom the money is owed may not have to honor your agreement of debt division. They will still be able to go after the spouse who signed the contract despite your agreement. This means if the spouse who has agreed to pay the debt fails to do so, the spouse who was originally responsible for the specific debt will be charged for the original debt, any late fees, any interest, and their credit rate could suffer.
There are, however, ways to divide debt that can avoid such potential issues. For instance each party could open a new credit card in their name alone, transferring equal balances. Another potential way to avoid issues is to sell an asset and to use the proceeds to pay any debt owed. For assistance with equal property division of assets and debt, it is vital to contact an attorney experienced in divorce law.
The risk is too great to try to go this alone or without quality help. Debt in divorce can be quite tricky, and it can lead to many problems down the road. The most efficient divorces are those that resolve all matters clearly, eliminating the risk of prolonged legal fights. Yet, unpaid debt, when not handled properly, can force couples into battle for months (or even years) after they officially end their relationship.
Getting Legal Help in Northern California:
The Santa Rosa divorce lawyers at our firm have helped divorcing couples in Santa Rosa, Petaluma, Ukiah, Hidden Valley Lake and throughout Sonoma County, Mendocino County and Lake County California to navigate through the process of divorce for many years, and we can help protect your best interest.
If you are considering a divorce, contact our firm for help. We have the experience needed to adequately protect your rights during this complex process. For a consultation call Beck Law P.C., at 707-576-7175 or contact us online.
See Related Blog Posts:
Am I Entitled to Spousal Support?
Uncovering Marital Assets in a Divorce