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Property and debts in a divorce

Part of your divorce involves dividing your property and debts and getting a formal order from the court about these issues.

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A judge has to approve how you'll divide your property
Two types of property: Community and separate
How to tell if something is community or separate property
How to divide your property and debts
Key takeaways

A judge has to approve how you’ll divide your property and debts

Part of your divorce involves dividing your property and debts. Property is anything you can buy or sell or has value. For example, a house, car, or furniture. And things like a bank account, pension, 401k, or stocks. It is also your debts, like your credit card debt or loans.

Even if you divided everything informally when you separated, a judge still needs to make a formal order about these issues. This doesn’t mean you have to go to court. You and your spouse can reach an agreement and ask the judge to approve that agreement. If you can't decide, a judge can decide for you at a hearing or trial.

Until you have a court order, any property or debt from your marriage still belongs to both of you.

This is true no matter who is using it or who has it with them.

Two types of property: Community and separate

California divides property into two categories, community property and separate property. This is how a court will decide how to divide your property. In general, you keep your separate property and split your community property.

What is community property?

What you own or owe together during your marriage

If you lived outside California for part of your marriage, then you both moved to California, what you earned or debts you took out during the time you lived outside California is called quasi-community property. This property is treated like community property.

What is separate property?

What you each own or owe individually from before you married or after you separated (the date of separation). And any gifts or inheritance either of you received at any time.

How to tell if something is community or separate property

Date of separation

First, you need to know when you married and when you separated to figure out what's separate property and what's community property. The day of your marriage is generally easy to figure out. The date of separation can be trickier.

The date of separation is

The day that one of you let the other one know (by actions or words) that you wanted to end your marriage, and
After that day, your or your spouse's actions were consistent with wanting to end your marriage

For example, the date of separation might be:

The day you (or your spouse) moved out
The day the two of you agreed together that your marriage was over, and you made plans to divorce.

How to tell when something is community property

Generally, this is what either of you earned (or debt you took out) after you married but before your date of separation. The “community” is you and your spouse. The property belongs to you both equally.

Community property is:

Anything you earned while married
Anything you bought with money you earned while married
Debt you take on while married

Property you didn’t earn, like a gift or inheritance one of you received while married, is not community property.

Generally, a loan to pay for one spouse's education or training (student debt) is treated like that spouse's separate property. After you divorce, that spouse will be responsible for their student debt. In some cases, if you used community money to pay down a student loan, the spouse who didn't get the education can get reimbursed for their share of community money spent on the other spouse's education. Talk to a lawyer if either of you have a lot of student debt.

You may have more community property than you realize. Many people don’t think about retirement or pension plans. If your spouse has a retirement plan, you have the right to part of the money in that plan if any of it was earned during your marriage.

You may have more community debts than you realize. Your spouse may have debt in only their name that you don’t know about. Usually, these debts belong to you both, even if it's only in one person's name.

Example: home mortgage

If you took out a mortgage to buy a house while married, that debt is community property. You’re both responsible for it.
Example: car

If you bought a car with money that only you earned while married, the car is community property even though the money used to pay for it was earned by you and not your spouse. It doesn't matter if only you drive it or if it's only in your name.

How to tell when something is separate property

Generally, separate property is:

Anything you earned or owned (or a debt) from before you married or after the date of separation
Anything you buy with separate property or you earn from separate property
Gifts or inheritance (to one of you) even if it was given or inherited when you were married

If you have separate property, it belongs only to you, as long as it was kept separate. Keeping it separate means you didn’t give it to your spouse.

Example: Car before you married

You had a car from before you married. You got married. You sold the car and used all that money (and no other money) to buy a different car. That new car is your separate property even though you bought it while married.
Example: vacation after separation

After you separated, you went on vacation and charged the vacation to your credit card. This is your separate debt.

Sometimes property is part community, part separate

Property can be part community and part separate. This is called commingling. This just means that separate property and community property got mixed together.

This often happens with big purchases, retirement plans, and bank accounts.

Example: Down payment for a House

One spouse uses money they earned before they married as a down payment on a house. The down payment for this new house is separate property. The married couple uses money they’re earning during the marriage to make the mortgage payments. This means the payments are made using community property. The equity (value) resulting from paying down the house loan is community property. The equity in the house is now part community and part separate property.
Example: Retirement Plan

One spouse has a retirement benefit from a job they had since before they married. The contributions made to the plan before the marriage are separate property. The contributions made while married are community property. After they separate, the new contributions are separate property.

How to divide your property and debts

In general, after a divorce, a judge will order that you:

Keep your separate property
Divide your community property equally

You and your spouse can agree to something different if you both think it’s fair. But, if you do not agree on how to divide community property, a judge will generally divide your community property equally.

When property is complicated, talk to a lawyer for advice

The property and debts part of a divorce can be complicated, especially if you have anything of high value or a lot of debt. Talk to a lawyer before you file or sign any property agreements. You can consult a lawyer just to help with the property and debts part of your case.

Some reasons to talk to a lawyer:

You disagree about what to do with a house or business you own
You have a lot of debt, you may even be facing bankruptcy
You signed a prenuptial or postnuptial agreement
Your spouse took out debt or bought something for someone without your knowledge (like a gambling debt or used your community money for a relationship with someone else)
If either of you has a retirement plan, especially a pension