Community Property Debts (California Family Code 2550)
Any debt that was acquired from the date of marriage to the date of separation is characterized as community property even though a debt is a negative value. The debt is considered to be part of the community estate. California community property laws will be applicable to a community debt when it is divided in a divorce or legal separation. Thus, under Family Code section 2550, unless the parties agree otherwise, the court must divide a community property debt equally between the parties.
The following can be characterized as community property debts:
• Car loans
• Loans taken out on a party’s 401K, IRA, pension or retirement
• Student loans
• Personal loans that are unsecured
• Child and/or spousal support arrears; AND
• Credit cards
Therefore, regardless of whose name the debt is in, both parties are equally responsible for the debt. The court will divide the debt by assigning one-half to each party.
Wallin & Klarich Division of Property Lawyer
If you and your spouse have acquired substantial debt, or the division of debt in your divorce or legal separation will be an issue, it is important that you speak with one of Wallin & Klarich’s skilled division of property lawyers. Our lawyers can further explain how the division of debt will affect your divorce or legal separation and how it can affect you directly.
With offices located in Los Angeles, Orange, Riverside, San Bernardino, San Diego, Victorville, West Covina, Sherman Oaks, Torrance and Ventura , there is a Wallin & Klarich attorney available wherever you happen to live. We will get through this together.
Call us at (888) 749-7428 or fill out our online consultation form today. We will be there when you call.