Dividing Debt During Divorce in Rancho Cucamonga
Secure a Property Division Lawyer to Determine Who Has to Pay Back Debt
divorcing couples focus on what assets they can get during the property division process,
not many think of the debt. Much like property that was acquired during
the marriage, when a couple builds debt during the marriage, this can
be divided as well. The division of debt assures that one party isn’t
stuck with all amounts owed when both parties accrued the debt. Much like
property division, the court will utilize the community property and separate
property categories to determine which debts go to which party.
The division of debt should be equal for both parties based on the judgement
of the courts. Parties should add up the value of the assets received in
property division and subtract the amount of debt. The end result is the net value of the
property division and this should be equal to both parties. Before going
into the process, you should have a full list of all debts owed to make
sure nothing goes missing during the process.
Call (909) 992-0188 for a
free case evaluation.
Problems You May Encounter
Unfortunately, some couples attempt to divide the debt on their own by
simply dividing the amount of debt. This can cause potential problems
down the road as the lender can still go after the spouse who signed the
contract if the debt is not paid. For instance, if one spouse signs up
for a credit card that both parties use, but the other spouse agrees to
pay it off without any legally binding agreement and fails to do so, the
credit card company can still go through collections on the signing spouse.
This is an issue that is preventable.
To avoid potential problems with debt during
divorce, most couples pick one of two options:
- Sell their property and use the money to pay the debt prior to dividing
it between each other
- Whoever pays the joint credit card can get a new card in his or her name
only and transfer the balance
Make sure that you have a plan in place in order to avoid having to pay
the balance of the debt, any late fees, and interest, as well as ensuring
your credit score is not damaged. These are all important factors to consider
when deciding the best way to deal with the division of debt.
What Happens After Debt is Divided?
After the division of debt, it is important to make sure you and your spouse
follow through on the orders. There may be additional steps that the parties
must take in order to ensure things are completed properly. At James D.
Madden, Attorney at Law, we have the experience necessary to guide you
through the division of debt. Our firm can explain the details of your
case and work to help you move forward in the most positive way possible.
Call our Rancho Cucamonga divorce attorneys to learn more today at (909) 992-0188.