The assets and debts couples acquire while married classify as community property. As noted by the California Courts website, community property belongs to both spouses equally. Shared assets include household income and retirement plans even if only one spouse worked to acquire them.
During divorce, couples decide how to evenly divide their community property. Spouses may discuss “trading” one asset for another of equal value. If you wish to keep a shared car, for example, your spouse may allow you to take it in exchange for keeping another asset of the same value.
Divorce decrees may include a judge’s division
The court generally must approve of the arrangement that couples agree upon for dividing their assets. When couples cannot agree on an equal division, a judge may decide for them during a hearing. As noted by Forbes, the divorce decree could include information detailing a judge’s settlement.
Factors a judge may use to consider dividing community property include your marriage’s duration. The amount of money each spouse contributed to the household could factor into the court’s decision. Current and future earnings may also influence the judge’s outcome of who receives property.
Creditors may seek repayment from either spouse
Without an agreement specifying only one spouse takes over community property, you could run into problems after the divorce. Debts accumulated during your marriage, for example, may result in creditors seeking payment from either spouse. Experian notes that joint accounts continue to appear on both account owners’ credit reports.
California couples may create an arrangement to divide their assets. Some spouses may agree to sell their community property and use the proceeds to pay off their debts. After your separation date, however, assets and debts generally belong to the individual who bought them or took out the loans.