Debt Assignment During Divorce
Many of us are aware of the potential conflict surrounding asset distribution during divorce. Deciding who gets the home, who gets which car, and how investments and bank account holdings should be divided is on the forefront of many divorcing couples’ minds. However, you may not have heard of the horror stories involving debt allocation/assignment during divorce. Just like property collected during the marriage is called marital property and belongs to both parties, debt is dealt with in the same way.
During divorce, debt will be distributed “fairly” amongst both parties, just like property is distributed fairly. Note that “fairly” does not have to mean equally, and in many cases, the debt incurred by one party should not have to fall on the shoulders of another after the marriage has ended. Instead of plodding through this treacherous terrain without any idea of what your rights are, and in so doing setting yourself up for potential crippling debt and bankruptcy down the road, consider reaching out to an experienced San Jose divorce attorney for legal guidance and protection.
California Is a Community Property State
Debt is on many people’s minds these days. After all, the average married millennial couple has a combined debt of $60,000 in student loans at the beginning of the marriage, according to U.S. News & World Report. Because California is a community property state, all debt incurred during the marriage is owed by the “community” or both parties. Debt owed from before or after the marriage is the sole responsibility of each individual, such as student loans from before the marriage.
The Other Party Filed for Bankruptcy and Now the Debt Collectors are Coming After Me
If, during the divorce, the other party accepted legal responsibility for the debt, but since then has filed for bankruptcy, the debt collectors may still come after you in pursuit of payment. This can have a seriously damaging impact on your credit, ability to get a home or auto loan, and not to mention your peace of mind. However, there is a significant chance that you do not have to pay the debt collectors, particularly if the debt was not secured. An attorney can help you figure out what steps to take next.
A San Jose Divorce Attorney Is Here to Help
How should debt incurred during the marriage be divided in divorce? If one party gets the home, should the other be on the line for the mortgage debt? If the other party gets the car, should the other party have to pay the debt for that if the other party fails to pay it? What if one spouse had a gambling addiction or some other spending problem? The other party should not have to be responsible for that, should they? While the answers to these questions seem obvious, they can really only be answered by an attorney. Contact the dedicated San Jose family law attorneys at the office of Gemma V. Reyes today for a consultation on your case.