One of the most difficult aspects of divorce is to divide the assets that you have as part of your marriage. On top of the division of assets, you have to split the debts. All of this happens during the property division phase.
There are several points you should think about when you are going through property division in California. Here are a few to get you started:
Start the process early
You can start to work on the property division process even before you file for divorce. One of the first steps is to gather documents for all assets and debts. This includes bank statements, investment account reports, mortgages, deeds and anything else that has to do with your marital finances. If you aren’t able to get copies of the documentation, try to get at least the account numbers and balances together so you have that information handy when you start to divide property.
When the divorce is filed, there will be a Schedule of Assets and Debts exchanged between parties. Having a list of these ahead of times can help to ensure that everything is disclosed properly.
Negotiating with your ex
Most property division matters are handled through negotiations between the two parties. You and your ex will try to decide who is going to get what. You must ensure that you aren’t getting all of the debts with none of the assets.
It is possible to use debts to balance out the assets. For example, if one person gets the high value vacation home and the other person keeps the lower value marital home, the person with the higher value property can take on debts that balance out the deal.
Once you and your ex come up with the terms of the agreement, it isn’t in effect until the judge signs the documentation. Even if the court does agree to the division, there is one potential issue that you should remember – you might still be responsible for debts assigned to your ex.
When you have joint credit cards and other debts, the creditor might still hold you accountable for the debts if your ex doesn’t pay. Your divorce is a civil matter that is between you and your ex only. The creditors aren’t part of the agreement so they aren’t bound by law to comply with the terms. One way to get around having to deal with this situation is to sell some marital assets as part of the property division and use the proceeds to pay off the joint debts.