20 February 2011 0 Comments

Who is responsible for paying debts?

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California Family Code Section 910 states, “The community estate is liable for all debts incurred by either spouse during the marriage and prior to separation.”  During the marriage does not include when the spouses were living apart before a judgment of dissolution of marriage. 

The law says it does not matter whose name is on the bill or the reason the debt was incurred.  As long as it was incurred during the marriage and before separation, it is a community property debt and both parties are responsible for payment – it will be divided equally. 

In California, a community property state, creditors of one spouse can go after the joint income and assets of the couple to pay the debt.  It does not matter whose name is on the title document to the assets.  California couples can sign an agreement with each other to have their personal debts and income treated separately.  An example is a pre or postnuptial agreement.  This works if there is no business involved or before a business opens its doors.  However, if there already is a business, this type of agreement will not protect one spouse from liability for business debts that are already owed – only from liability for future business debts.

If you are going through a divorce and have debts that were incurred during the marriage and must be paid off, contact an experienced California Family Law attorney who can help put you on the road to debt-free living with a plan.

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