Manhattan Beach Division of Debt Lawyer
Many couples choose to legally separate before or instead of going through the full divorce process. If you go this route, you will still need to decide on several key issues, including the division of debt.
You will need to characterize your marital debt before it can be divided. The California Family Code spells out how to characterize debt, and some aspects of the law are very clear. However, there are many circumstances that are more complex. A skilled family law attorney can help you understand the specifics of these laws so that each spouse is responsible for their fair share of the debt.
Contact the Manhattan Beach separation agreement attorney of The Law Offices of Baden V. Mansfield today at 310-546-5858 to discuss your options for dividing debt during a legal separation.
Why You Need a Lawyer
Going through a legal separation can be stressful, especially when there are high-stakes financial decisions on the line. It would not be fair for you to take on any debt that is not legally yours, nor would it be fair to your partner if the opposite were true.
While you may have a basic idea of how the debt will be divided, many factors can affect the division, including the type of debt, the date acquired, and who benefited from using that money. A lawyer with experience in dividing debt within a separation agreement can help you understand how the law applies in your specific situation.
Why Choose Us
Attorney Baden V. Mansfield has been practicing law for over 40 years. During this time, he has helped clients work through a variety of complicated situations in family law. No two situations are the same, and Mr. Mansfield’s vast experience allows him to come up with unique and personal solutions to meet each of his clients’ needs.
Mr. Mansfield frequently obtains favorable case results for his clients. He has also received written feedback from many grateful clients who appreciate his calm demeanor, extensive knowledge, and thorough work during difficult times in their life.
How Is Debt Divided in California?
California is a “community property” state, which means that assets, as well as debts incurred during the marriage, are divided equally in a separation or divorce. An exception to this is if the spouses already had an agreement in place for dividing debt in the event of separation, such as a prenuptial agreement. Additionally, if the total debt is greater than the total assets, the court may assign a larger portion of the debt to the spouse who is more financially able to repay it.
Characterizing Marital Debt
Before the court can divide your debts, they will need to characterize the marital debt. These characterizations are made based on California law.
The types of debt include:
- Community Debt – This is typically debt that was incurred during the marriage and benefitted multiple members of the household. For example, if one parent used a credit card in their own name to purchase clothing and other items for the children and for the household as a whole, this debt would be divided between both spouses in a separation agreement. Tax obligations from the time the couple was married and living together are also part of the community debt.
- Separate Debt – Separate debt is usually incurred before marriage or after the time of separation. It is important to know how your date of separation is calculated because this could affect how debts from around that time period are characterized.
Not all debts fit neatly into one of these two categories. There are many circumstances where debts can be part community and part separate.
When Characterizing Debt Gets Complicated
Some common examples of debt that are not clearly separate or community property include:
- Mortgage – When a couple purchases a home together during marriage using only community funds, the mortgage is a community debt, and they will either need to sell the home or have one spouse buy out the other spouse’s portion.
However, many couples use separate property for a down payment and some mortgage payments, either before or during their marriage. Additionally, if one spouse continues to live in the home after separation, this can also complicate things.
- Student loans – This could fit as separate or community debt. Even if a student loan was incurred before marriage, if the loan was a benefit to the community, meaning it substantially increased that individual’s earning potential, it may still be divided as community property according to California law.
- Business debt – When a business is partly community and partly separate property, it can be difficult to determine which portion of the debt was accrued due to separate versus community efforts. There are multiple methods to calculate the division of business debt.
It is important to have a good understanding of how specific laws apply to the division of debt, especially in these complicated circumstances, but you do not need to worry about figuring this out on your own when you have a knowledgeable attorney on your side.
In most cases, the date the marriage began is very clear. However, determining the separation date can be a bit more complicated, especially if you have been experimenting with separate arrangements for quite some time.
The California Courts explain that the separation date could be when one spouse moved out or when you decided together that the marriage was over and began planning for divorce. Any debts incurred after this date would most likely be considered separate debts.
Contact a Manhattan Beach Separation Agreement Attorney Today
Dividing debt can be stressful and may be a cause for contention between the two parties. An experienced attorney can help you reach an equitable agreement when dividing debts.
Attorney Baden V. Mansfield has seen many complicated scenarios during his 40 years of legal practice. He does not shy away from difficult topics and consistently helps his clients secure favorable results. He will take the time to get to know you as a person and help you understand how the law applies in your unique situation.
Contact The Law Offices of Baden V. Mansfield today at 310-546-5858 for legal assistance you can count on.