Rarely do people plan to divorce the one they vowed to be with “until death do you part.” However, when it happens, you need to be prepared for how to separate both the property and the debt. Couples accumulate more than property over the course of a marriage. When the marriage dissolves, everything acquired during the marriage, including the debt, must be assigned to one or both parties.
Yours, mine and ours
What you brought into the marriage with you is considered separate property. That includes any debts you had before the marriage began. For example, if you had student loans before you got married and you get divorced before the loans are paid in full, you will take the debt of the loan with you as your responsibility. On the flip side, if your spouse had student loans before the marriage, those are not your responsibility after the divorce. The source of the funds and the timeline of the purchase help to determine the owner or the responsible party, in the case of debt.
The debts you accumulate as a couple, though, are considered communal property. Purchasing a home or a car together during the marriage leads to a loan that can be categorized as community property. The debt and the car are both considered property.
How to determine what is community debt and what is separate
Determining which property is communal and which is separate is not always as cut and dry as college loans or mortgages. What happens if you use inheritance money you received before the marriage to make a down payment on a home after the marriage? Who is responsible for the debt?
According to California law, the home might then be considered commingled property and the debt has to be settled using a debt collection attorney. It is not as simple as selling the house and dividing the money. The inheritance money was yours, but the house belonged to both of you. The division gets complicated and is best handled by a professional. A portion of the house might be considered community property and part separate property.
How a collection agency can help
While a divorce attorney can guide you through the divorce proceedings, custody dispute and alimony situation, the debt may remain unresolved. Even if the judge rules who is responsible for paying, the debt lasts beyond the time when the divorce is final. That is when an online collection agency like ours can help. Fill out a simple online form and let us take care of the rest.
If the debt collectors are calling you about a debt that is now the responsibility of your ex, let us recover the funds from the person responsible and play the role of liaison between the creditors and debtors. We can also help you navigate the debt laws to determine who owes what to whom. Don’t try to take the law into your own hand or resolve the debt yourself when you can have our professionals work on your behalf.