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What happens to marital debt in the event of a divorce?

On Behalf of | Dec 20, 2023 | Division of Property

Your marriage may end in divorce, but this does not mean that the debts you incurred while married will go away. If divorce is on the horizon, it is important that you have a clear understanding of what will happen to the debt. The last thing you want is to walk out of the marriage with the full burden of a debt that should have been shared, or one that you shouldn’t be part of.

Just like finances and other assets, debt is classified as either marital or personal. Marital debts are acquired while in the marriage while personal debts are those acquired before the marriage. That said, here is what you need to know about debt and divorce.

Equal division may not necessarily mean clean halves

California is a community property state. This means that all marital assets and debts are theoretically subject to a 50/50 split in the event of a divorce. The same theory applies when dividing marital debts. Personal debts stay with the person they belong to.

Couples can settle the subject of debt division out of court

If you are divorcing on good terms, then you and your spouse can come up with your marital debt division settlement without involving the court. In other words, as long as you are on the same page, you don’t have to follow the 50/50 rule when dividing marital debt.

Another exception is if you created a pre or post-nuptial agreement that specifies how you will divide marital property and debts in the event of a divorce. As long as the agreement is valid, the court will enforce it.

Debt division can be a complicated subject during a divorce. Understanding how California’s property division laws work can help you protect your interests.