How Washington community property laws impact debt division

On Behalf of | Oct 1, 2018 | Firm News

Careful planning can reduce the financial stress related to divorce. For many people, divorce can be a source of improved financial health. This is particularly true for people who have a spouse who shops compulsively or simply cannot save money. Your divorce can be an opportunity to separate your financial situation from that of your ex.

Unfortunately, you may end up sharing responsibility for some of the debt that your ex has already incurred during your marriage. Familiarizing yourself with community property laws and how they impact debt division in Washington state can help you advocate for the best possible outcome when the time comes to divide your assets and debts.

Community property laws mean that you often share those debts

Washington state law makes it a community property state. In other words, both spouses share an ownership interest in all the assets acquired during the marriage. The courts will typically use the same standard when determining the best way to split up debts incurred during the marriage.

The courts care more about when you acquire debt than whose name is on the loan, credit card or account. Knowing that you may end up responsible for a significant portion of debt incurred by your spouse can be upsetting. However, there may be situations in which you will not have to share responsibility for debt that your spouse racked up during marriage.

Special situations can impact the asset and debt division process

There are special circumstances under which the outcome of the asset and debt division process could change. The first and most obvious is the existence of a prenuptial agreement. Some couples address issues like credit card and student loan debt in a prenuptial agreement. The agreement may outline that each spouse remains independently responsible for the debt they incur. If that is the case in your marriage, you will likely not have to worry about debts your ex incurred.

If you do not have a prenuptial agreement, there are still situations in which you may not be responsible for debts. In cases of dissipation, where one spouse intentionally wastes funds, the courts may make that spouse responsible for the money they spent.

That is also true of money spent or debt accumulated as a result of conducting an extramarital affair. If your ex spent a significant amount of money on hotels, dinners and gifts for an extramarital affair, the courts may adjust how they divide assets and debts accordingly.

Finally, you may be able to plead that the debts in no way impacted your marital property. For example, if your spouse purchased items for their sole use and the money spent did not benefit the household, you may be able to avoid responsibility for a portion of those debts. If your ex purchased many designer outfits, for example, and those outfits did not directly relate to their ability to secure income for your household, that could be a situation in which those debts remain solely one spouse’s concern.

Dividing debts in a community property state can quickly become complicated and contentious. If you hope to avoid paying off debts incurred by your ex, you should start planning a strategy and exploring your options as soon as possible.

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