How to Split Debt in Divorce

Unfortunately debt in divorce is an inevitable part of the process. One very difficult part of that process is determining responsibility for debt incurred during the marriage. Community property states such as California, Arizona & Idaho just to name a few treat marital property and income differently than other states (which are sometimes called common law states). Here are some general guidelines to assist in splitting your divorce debt.

Difficulty:

Moderate

Instructions

Things You'll Need

• List of Debts

1. Community property is specific to debt that you accumulated during the marriage. There has to be a property settlement agreement in place which spells out whom is responsible for what. Hopefully you and your spouse haven't reached a point where you aren't able to communicate with each other in order to come to a consensual agreement on how to split your debts.

2. Debt incurred either before the marriage or after the separation is the responsibility of that party and so the responsibility there is clear cut. You do, however have to list both separate and community property on your settlement agreement which will eventually be submitted along with your divorce petition.

3. A settlement agreement or separation agreement is simply a formal outline of community and separate property indicating a mutual plan between yourself and your spouse to split your divorce debt. Although the link below is for instructions specific to California, it can serve as a general guide to help you along the way.

Tips & Warnings

• Keep in mind this is only a small part of the divorce process. There are several steps you must take in order to get things moving with your divorce. Although this sounds like a fairly simple process, it all hinges on whether or not you can sit down with your soon to be ex-spouse and work together to come to an agreement.

Resources

• How to Prepare a Divorce Settlement Agreement in California
• Property Settlement Agreement
• Sample Form
• How to Recover From Your Divorce
• Financial Resources