Do I Have To Pay My Former Spouse's Debts?

Understanding Debt and Divorce in a Community Property State

There are many reasons why a marriage may end, and settling affairs during a divorce can be challenging. One question many ask at the onset of a divorce is, “Will I have to pay for my former spouse’s debt that was incurred during the marriage?”

The type of debt depends on where you live. California is one of the states that uses the “community property” system of ownership in marriage. In a community property state debt assumed during your marriage is understood to be “community” responsibility, each spouse is under equal obligation for repayment of any debt.

Community Debt

Community property is property that is owned jointly by both spouses. In community property states, most debt incurred during marriage is owed by the “community” (the couple), no matter whether both spouses agreed to the debts or knew about them. Debt that was accumulated by one spouse prior to marriage however, such as a credit card balance, student loan or car payments, is typically owed by one spouse only. Likewise, the gifts, inheritances and separate property owned before marriage typically remain the property of that spouse exclusively. However, comingling during marriage can negate a party’s argument that a debt or asset is to be treated as separate property.

Comingling

What is comingling?  It is when one spouse’s separate property is mixed with the couple’s marital property during the marriage. This commonly happens when a couple uses marital funds to improve, maintain, contribute, or pay off a property asset.  This is where lines get blurred, and the assistance of a divorce attorney will be a benefit to untangling the division of assets and debts.

In some cases tracing may be used to determine what part of an asset or debt is separate property and what part belongs to the ”community”.  A common example is when one party has purchased a home prior to marriage then during marriage used community funds to pay for the mortgage and other home related expenses.  It does not matter if the home is in both or one spouse’s name or if a Quitclaim deed was executed.  The act of using “community” funds gives the community (both spouses) an interest.

Getting the Legal Advice You Need

Unfortunately, having to pay for your former spouse’s debts is not the only consequence of a divorce in a community property state.  Divorces involving high value assets and business interests typically present more complex and challenging issues. For couples who have substantial assets or wealth, going through a divorce can be a complex and thorny process. Pre- or post-nuptial agreements can circumvent the effects of community property issues and protect spouses from liability for future business debts. But even with such an agreement, spouses need the help of experienced high asset divorce attorneys. At Buncher Family Law we have experienced and well-rounded counsel to handle your complex and sensitive family law matters especially when they overlap with other areas of the law.

If you are thinking of hiring an attorney to represent your high asset divorce and related family law issues, we are ready to help. Connect with us today to schedule a consultation.

Posted in High Asset Divorce, Property Division.