How is Credit Card Debt Split in Divorce in California?

When you get a divorce in Stockton, you and your spouse will have to divide your property – and property includes both assets and debts.

California is a community property state, so usually, the division of credit card debt is pretty clear-cut. Here’s what you need to know.

Related: Community property basics in California

What is Community Property?

The term community property refers to assets or income that belong to both parties in a marriage. Even if only one spouse earned or brought in the asset, the other party is entitled to a fair share of it.

The same is true with debts, in many cases.

If the debt was incurred during the marriage, by either or both parties, it’s community.

There are some exceptions that fall under separate property, though. Separate property is property that belongs to only one party. Usually, that means one party brought it with them into the marriage.

Related: Are assets always split 50-50 in a California divorce?

How is Credit Card Debt Split in Divorce in California?

When you have community credit card debt, you and your spouse will have to figure out how to divide it equitably and fairly. You don’t have to split it down the middle. You just have to make sure that it’s fair.

Examples of Splitting Credit Card Debt in Divorce

Let’s say you and your spouse have combined credit card debt of $10,000. You have two savings accounts between you – one is worth $30,000 and the other is worth $20,000. It would be fair to give the $20,000 account to one spouse while the other spouse gets the $30,000 account and the $10,000 debt responsibility.

In another scenario, you have combined credit card debt of $7,500. You have a joint savings account that’s worth $17,500. It would be fair to pay off the debt of $7,500 from that account and split the remaining $10,000 – or to give one party $5,000 and the other party $12,500 plus the debt responsibility.

If you don’t have savings and you’re getting a divorce with credit card debt, you’ll most likely end up having to agree to splitting the responsibility for the debt.

You can also negotiate other ways to make it fair. For example, if one of you receives a vehicle that’s paid off, a certain piece of art or anything else of value, you may choose for that person to be responsible for a larger portion of the debt.

Related: 13 divorce negotiation tips you can use today

What About Your Creditors?

Your creditors are just along for the ride in a situation like this. You need to remember that if your name is on a credit card and your spouse ends up being responsible for paying it, your name is still the one attached to it – and it’s your credit score that will take a hit if your spouse fails to pay. You will still be liable for the debt.

For this reason, it’s often best to sell property before the divorce is final and use the proceeds to pay off the debt. Another option: You can use balance transfers or refinancing to shift the debt responsibility into your spouse’s name.

The bottom line, though, is that every situation is different. You and your spouse might be able to reach a fair agreement that doesn’t match anything you see here, or you might choose to see a mediator to hammer out your differences and find fair resolutions.

Related: What is divorce mediation?

Do You Need to Talk to a Stockton Divorce Lawyer About Credit Card Debt and Divorce?

If you’re divorcing your spouse, we can help you find solutions that work out best for everyone involved.

Call us at 209-546-6870 to schedule a consultation with a caring, compassionate and knowledgeable divorce attorney in Stockton right now. We’ll answer your questions about child custody and child support, property division and more.