In California, debts incurred by either spouse while married are the responsibility of both spouses, even if only one spouse took them out. These are referred to as community debts, as opposed to separate debts that remain the responsibility of the debtor-spouse only.
Most community debts will be divided equally should the spouses divorce, but there are some carve-outs in California law in which debt incurred while married will be treated as separate debt in the event of a divorce.
Debts incurred after separation
Most California couples separate for a period while their divorce is pending. Debts a spouse incurs after the date of separation are not considered community debts. This means they will remain the responsibility of the spouse that took them out.
The date of separation can be somewhat difficult to discern. California uses a two-prong test to determine when a couple separated.
The first prong is the date of physical separation — when did one spouse move out of the shared home?
The second prong is the date one or both spouses decided to divorce. A trial separation, for example, might not be done with the explicit intent to end the marriage.
There are more community debts than assets
Under California law, an unequal distribution of debts is warranted when the value of community debts is greater than the value of the community assets. In this situation, the spouse who is better-off financially will usually be assigned the surplus debt, even if it is technically community debt.
Student loan debt
Unless the parties agree otherwise in writing, student loan debt will generally be assigned to the spouse who took out the loan, even if the loan was taken out during marriage. However, if both spouses benefited from the loan, then the loan might be divided as community debt between the spouses in a divorce.
The spouses have a prenuptial agreement
These days, it is not unusual for a couple to sign a prenuptial agreement before marrying that assigns certain debts to one spouse or the other in the event of a divorce, regardless of who incurred them and when. Assuming the prenuptial agreement is valid, it will be honored when it comes to the division of debts in a divorce.
Complex division of debts in a divorce
As this shows, the division of debts in a California divorce is more complex than it may appear on its face. It is a faulty assumption to believe that every single marital debt will automatically be divided equally between spouses.
There are exceptions to this general rule carved out in California law that should be recognized, to ensure the division of debts is fair to both parties.