Most people who start the divorce process start by saying "this is my bank account" or "the house is only in my name". These statements may have legal significance, but the form of title of an asset does not always control it's division. If you acquired an asset during your marriage, and the asset was not acquired by gift, inheritance or pre-marriage money, it will likely be deemed community property.
A common question becomes if a spouse has separate property, i.e. an asset that was acquired before marriage, or by gift, or by inheritance, can a creditor collect that asset to pay a debt. The answer is as follows:
California Family Code Section 916 controls what separate property is liable for debts after the division of community property:
(a) Notwithstanding any other provision of this chapter, after division of community and quasi-community property pursuant to Division 7 (commencing with Section 2500):
(1) The separate property owned by a married person at the time of the division and the property received by the person in the division is liable for a debt incurred by the person before or during marriage and the person is personally liable for the debt, whether or not the debt was assigned for payment by the person's spouse in the division.
(2) The separate property owned by a married person at the time of the division and the property received by the person in the division is not liable for a debt incurred by the person's spouse before or during marriage, and the person is not personally liable for the debt, unless the debt was assigned for payment by the person in the division of the property. Nothing in this paragraph affects the liability of property for the satisfaction of a lien on the property.
(3) The separate property owned by a married person at the time of the division and the property received by the person in the division is liable for a debt incurred by the person's spouse before or during marriage, and the person is personally liable for the debt, if the debt was assigned for payment by the person in the division of the property. If a money judgment for the debt is entered after the division, the property is not subject to enforcement of the judgment and the judgment may not be enforced against the married person, unless the person is made a party to the judgment for the purpose of this paragraph.
(b) If property of a married person is applied to the satisfaction of a money judgment pursuant to subdivision (a) for a debt incurred by the person that is assigned for payment by the person's spouse, the person has a right of reimbursement from the person's spouse to the extent of the property applied, with interest at the legal rate, and may recover reasonable attorney's fees incurred in enforcing the right of reimbursement.
If you have any questions regarding debt liability in a divorce, call the Certified Family Law Expert, Marcus Morales, and our team at Morales Law.