Community property statutes often leave people anxious about divorce proceedings in Washington. They may worry about the consequences of dividing their most valuable resources. They may also have to share responsibility for major financial obligations.
Unless the spouses are entirely debt-free, they may need to divide their debts during property division negotiations. What do people need to consider to protect themselves during that process?
Not all debts are marital
Not every financial obligation is part of the marital estate. Typically, debts that people took on before getting married or after separating from their spouses are not part of the marital estate.
Additionally, debts that represent the dissipation of marital property may not be subject to division. If someone accrued debt maliciously because they intended to file for divorce or for purposes that damage the marriage, such as an adulterous affair, those debts may not factor into the property division process.
Avoiding debts isn’t always the best strategy
Many people hope to move on from their divorces without much debt. They may fight to have their spouses take responsibility for as many debts as possible. The problem with that approach is that if their spouse defaults on credit card payments or files for personal bankruptcy, creditors may come after the other spouse.
A family court decree does not eliminate the shared responsibility for debt even after the divorce occurs. Some people may want to take responsibility for debt to avoid financial issues caused by their spouses after divorce. Others may want to pay off their debts using marital assets if possible.
Setting appropriate divorce goals can help people stay focused on the big picture. Household debts can have a profound impact on the outcome of community property division.
