Division of Assets and Debts

California is a “no-fault” state. This statement means that, regardless of who is at fault for the break-up of the marriage or domestic partnership, the judge in the family law court will try to equally divide the assets and the debts between the parties. This means that if one party gets a house worth $200,000, on which the parties owe $100,000, the Court will award the other party $100,000 of value in other assets.

The Court cannot be successful in making an equal division of the assets (things of value) and the debts unless the judge has accurate information regarding the value of each of the assets and the amount of the parties’ debts. As in the issues previously discussed, it is the responsibility of the parties to give this information to the Court. Failure to give the correct information could result in an incredibly uneven division of assets and debts. For example, if the parties agree that the family home is worth $250,000, and that there is a $100,000 mortgage, and that it should be awarded to the petitioner, then the respondent must get $150,000 in other assets to equalize it.

But if the petitioner tries to sell the house and discovers that all it can be sold for is $180,000, then the petitioner gave $150,000 in assets to the respondent in exchange for $80,000 in equity in the house. If the parties and the judge had used the actual, current, fair market value of the house, then the respondent would have received $80,000 in assets, and the parties would have divided the other $70,000 in assets equally.

Think of the house, the mortgages, all the rooms of furniture, the coin collection, the vehicles and the loans on them, the retirement plans, the small business, the pension plan, the IRA’s, the IRS lien, and the credit cards. Giving the Court all of the information it needs to to fairly divide the assets and debts can be a huge task. In addition, there are special rules about debts before marriage, inheritances received during marriage, and even gifts during marriage.

A qualified family law attorney can help you find ways to obtain this information, organize it, and present it to help the judge make a decision that you believe is fair and just. Our Hemet, California firm can work with you to do just that. To find out how we can assist you in obtaining fair property division, contact Julie Clark, Attorney at Law or request an appointment.