Debts you and your spouse incurred before marriage remain your own individual obligations—but you'll share responsibility for debts you take on together after the wedding.
Credit card debt liability in common law states
However, creditors do have recourse to your spouse's share in any assets that you own jointly with them. And if you are a joint account-holder on a credit card, both of you will be liable. You would also be liable if you co-signed the account for them.
Since California is a community property state, the law applies that the community estate shared between both individuals is liable for a debt incurred by either spouse during the marriage. All community property shared equally between husband and wife can be held liable for repaying the debts of one spouse.
Keep separate bank accounts, take out car and other loans in one name only and title property to one person or the other. Doing so limits your vulnerability to your spouse's creditors, who can only take items that belong solely to her or her share in jointly owned property.
Financial infidelity is when couples with combined finances lie to each other about money. Examples of financial infidelity can include hiding existing debts, excessive expenditures without notifying the other partner, and lying about the use of money.
Matrimonial debt on divorce
These “matrimonial” debts would typically include debts incurred to fund building work and improvements to the family home, family holidays or the family car.
The basics. You are not legally responsible for your partner's debts unless they are joint debts or you have acted as guarantor. It doesn't matter whether you are living together nor whether you are married – one person is not responsible for another person's debts.
Family members, including spouses, are generally not responsible for paying off the debts of their deceased relatives. That includes credit card debts, student loans, car loans, mortgages and business loans. Instead, any outstanding debts would be paid out from the deceased person's estate.
Neither part of a marriage is liable for their partners debt by default. If you sign a finance agreement together, however, this makes you jointly and severally liable which means you will be held liable.
With any joint debts you have – for example, a joint bank loan, overdraft or mortgage – you're usually both liable to repay the whole amount. That means if your ex-partner doesn't pay their share, the bank or building society might ask you to make all the payments.
The general rule in California is that a spouse ceases to be responsible for any debts incurred by the other spouse once they have separated.
In common law states, debt taken on after marriage is usually treated as being separate and belonging only to the spouse who incurred them. The exception are those debts that are in the spouse's name only but benefit both partners.
Even your credit score is independent from their credit score. Can you be responsible for someone else's debt? You are lawfully never responsible for someone else's debt. Whether it's your parent, your partner, or any other person you're associated with, they cannot hold you accountable for money that they borrowed.
How Is Debt Split in a Divorce in California? California is a “community property” state, which means that any assets acquired and any debts incurred by either spouse during the marriage belong equally to both spouses.
In the absence of a divorce settlement agreement between the spouses, they retain their own separate estates and there is no sharing of assets on divorce, unless the court granting the decree of divorce orders a redistribution of assets between the parties in terms of Section 7(3) of the Divorce Act.
Assets that you have built up or acquired during the period of marriage are known as matrimonial assets or marital assets. These typically include property, pensions, savings, personal belongings, and cash in the bank.
If you live in one of the community property states – Arizona, Wisconsin, California, Washington, Idaho, Texas, Louisiana, New Mexico or Nevada – the law treats all the money you saved as being equally owned by both of you.
If you have any joint debt with your spouse and you can afford to, we highly recommend paying off all marital debt, even before you draw up the divorce papers. If not before you file for divorce, try to get it done before you're officially divorced.
Marital property is generally defined as all income, property, and debts acquired during the marriage. That property is seen as owned equally by both spouses, and therefore will be distributed equally after the divorce, with a couple caveats.
If either party wishes to marry someone else legally, they will need to file for divorce so they do not commit bigamy. However, if both spouses are on good terms and want to share benefits until each party has the opportunity to establish their own benefits arrangements, separation may be a good option.
What is a non-working spouse entitled to in a divorce? A non-working spouse is entitled to receive alimony payments from their ex-spouse and can acquire up to 50 percent of property. However, this depends largely on whether they are voluntarily or involuntarily unemployed.