Nakos and Nakos, Attorneys At Law
About Division of Assets and Debts
Overview: Assets that are acquired during marriage and debts that are incurred during marriage, with a few exceptions, are characterized by the Courts as community property assets and debts and must be equally divided between the parties by the Court during a divorce or legal separation. By law, each party must fill out a set of paperwork called a “Schedule of Assets and Debts” and Income and Expense Declaration, collectively known as a disclosure, and give that to the other party. That document is typically used as an outline of what assets and debts there are to divide. Sometimes parties feel like it is an invasion of their privacy to list all of their assets, especially separate property assets, but you must be open and honest with your disclosure. If not, you jeopardize your final Judgment being set aside for fraud, along with other penalties.
Equal Division: Though the community property asset and debt division should be equal, that does not mean that you literally have to divide each asset and debt. For example, if there are two credit cards and with roughly the same amount of debt, one party can assume one credit card and the other party can assume the other credit card. If there are two bank accounts, with roughly the same amount, one party can keep one account and the other can keep the other account. If, in the division, for example, one party is assuming a bit more credit card debt than the other, then the party with the lower debt might equalize the division by paying some money out of the bank account he/she is awarded. (Remember, credit card companies and other creditors do not have to honor what you agree to with the other party. The creditor can still come after you for the debt that the other party says he/she will take on, so be careful in dividing debt). It is not uncommon that the division is not exactly equal. That is up to you, but if you cannot agree then the Court will divide them for you. Sometimes it is not worth the attorneys fees it will cost to fight for a precisely equal division. That is a decision you can make.
No Division: Separate property is property that you had before marriage, acquired after marriage with your separate property (such as your post separation earnings) or were given as a gift or by inheritance. You do not need to divide that with the other party. But, you do need to list it on your Schedule of Assets and Debts.
Be careful. There are unique areas of asset and debt division, such as division of pensions, personal injury awards, reimbursement if you used your separate property towards the purchase of a community house, reimbursement if you use community assets to pay for a spouses’ separate property, etc. Nakos and Nakos can prepare your Schedule of Assets and Debts and help you in all areas of asset and debt division, We will work with the other side to achieve a fair division that you feel good about and, if no agreement can be reached, we will fight for your rights in Court.