While you work through your property to divide, remember to also work through your debts. Debts are assigned in the same way as property. If incurred during marriage, the debt is a community obligation, unless it was incurred in a frivolous or fraudulent manner. If the debt is a community, you are each responsible for one-half.
If you incurred a debt prior to marriage or after the date of separation, this is your separate responsibility. School loans are the exception. Even if you incurred school loans during marriage, the loans are your separate responsibility.
Make sure you are aware of all outstanding debts. This includes credit cards, car loans, and money you borrowed from a family member. Run a credit report to get a comprehensive list of debts. You are entitled to one free credit report a year and your credit score is not negatively impacted when you look up your own credit.
It is especially important to know whether you are both named on the debt. At the end of your divorce, you do not want to be named on any debts with your spouse. If you are both in debt, the creditor can come after either of you, even if your agreement says your spouse is responsible. If you have joint credit cards, agree to close those cards. If you are an authorized user, you do not need to close the card. The owner just needs to remove you as a user, and then the owner's spouse can continue using the card.
The most important part of the asset and debt division is to reach an agreement that is fair and makes sense for you and your family. Identifying your separate property may be very important to you. If so, take time to pull records, like bank statements, receipts, or deeds, to prove your separate property. Even if you don’t have the best records, you can negotiate an amount with your spouse that you believe is fair.
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