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Dividing credit card debt in a California divorce

On Behalf of | Sep 7, 2023 | Divorce

Divorce in itself is already a demanding process with several aspects to resolve. The last thing you would want to worry about is credit card debt you did not amass in the first place. This is one of the concerns of divorcing spouses who have joint credit card accounts.

California’s rule on property division

Before anything else, parties need to understand how courts divide properties and debts during the divorce. California is one of the few states that follow a community division of property, which divides marital assets and debt equally between spouses.

But what counts as marital? These pertain to properties and debts the spouses acquire after marriage but before legal separation. However, a few exceptions exist, such as individual gifts or inheritances received during the marriage.

What does the rule mean for credit card debts?

Applying the state’s property division rules, the courts will divide debts incurred by spouses during the marriage equally between them. Hence, they will be jointly responsible for credit card obligations, no matter who made the purchase and regardless of whether the card is individual or joint.

Are there ways to bypass this rule?

Fortunately, there are exceptions to the state’s property division rule.

First, spouses can agree on different division terms, not necessarily resulting in a 50-50 split. The two common agreements that can make this arrangement possible are prenuptial contracts and divorce settlement agreements.

Second, debts accumulated in support of a marital affair or gambling habits will be the sole responsibility of the purchasing spouse. The reasoning behind this is that these acts are wasteful dissipation of marital assets.

Exploring options to protect rights

Some may be discouraged by the community property division rule. Nevertheless, this rule is not absolute. Hence, one should continue looking into viable options to avoid dealing with debts they did not acquire. A trustworthy and knowledgeable legal team can guide divorce parties to find solutions to protect their rights.