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San Jose Divorce Attorney > Blog > Divorce > Is Your Debt Community Property If One Spouse Incurred It Single-Handedly?

Is Your Debt Community Property If One Spouse Incurred It Single-Handedly?


Debt can be a major source of conflict and stress in marriage, even when the couple has made every effort to live within their means and had little other choice but to borrow money.  You probably know someone who is full of resentment about the money their spouse borrowed during the marriage.  Maybe your neighbor hates it that his wife never re-entered the workforce after their children got older, but she still manages to go on weekend shopping trips to Beverly Hills with marital credit cards.  Maybe your co-worker is tired of being the only one to bring home a steady paycheck while her husband keeps saying that his latest business idea is the next big thing and promising that it will become profitable after one more business loan.  Perhaps your brother has confided in you that he isn’t enthusiastic about your sister-in-law taking out student loans for a second master degree, since she never used her first one professionally.  If you really want to see things get ugly, ask people how they feel about getting stuck with half of the debt their former spouse racked up.  Marital debt can be even more of a sticking point in California than it is in most other states.  If you think that it is unfair for your marital debt to be divided evenly in half in your divorce, contact a San Jose divorce lawyer.

Dividing the Marital Debt in Half Is the Default Option

This week, a man who signed his name as “Desperate” wrote to Marketwatch to ask for advice about his financial situation.  Desperate has been working full time since he was a young man, but he has no money saved for retirement, because his wife has a gambling addiction and his adult stepchildren are unemployed and depend on him financially.  He says that, at this rate, he will never be able to afford to retire.

In his response, Quentin Fottrell, the author of the Marketwatch column, focused on the fact that Desperate lives in a community property state; California is one of nine community property states.  In community property states, the divorce court divides all the assets acquired during the marriage and all the debt incurred during the marriage evenly in half, regardless of which spouse earned or borrowed what.  Of course, there are exceptions; if you have a prenuptial agreement, the court will follow that instead of the community property rules.  Fottrell thinks that, in a situation like Desperate’s, the court might consider the wife’s gambling debts as intentional wasting of marital assets instead of as marital debt.  In other words, it is possible to persuade the court that you should not be responsible for your ex-spouse’s debts (depending on the type of debt and the circumstances), but you have an uphill battle.

Let Us Help You Today

Debt can ruin marriages, but a San Jose divorce lawyer can help protect you from your former spouse’s debts ruining your finances.  Contact Foster Hsu for help today.



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