Divorce Property and Debts

If you and your spouse are divorcing, the division of property and debt can be one of the most contentious issues you experience. While it is always recommended that parties work together to create a plan for addressing debts and assets, the law does provide guidance on how it should be handled. States are divided in the manner that they address the marital estate, with most states following what is called equitable distribution and a few following community laws. If you live in a community property state, the rules can be a bit confusing and are frequently misunderstood. To get a basic lesson in this form of divorce and know what you can expect, read on. 

What is the marital estate in a community property state?

Only 9 states follow the community property rules, and they are listed below, with one state that uses a hybrid model. When it comes to the term "marital estate," all of the property owned by either party and all debts by either party is included. That property encompasses the home, vehicles, boats, vacation cabins, pets, and more. The term "community" means the divorcing couple; a community of two people.

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin
  • Divorcing couples in Alaska can choose to use either community property or equitable distribution for each piece of property and each debt.


If your spouse has not demonstrated wise financial decision-making during your marriage, you may now have to share some of the ramifications. That is because all debt taken on during the marriage belongs to both of you, equally. Any debt your spouse entered the marriage with is exempt and belongs only to them. Even if you knew nothing about that Visa card with a $15,000 balance, it is partly your responsibility.

It is not necessary for you to be a signer on the account or to have a card in your name, you are 50% responsible for the debt. By the way, that debt that your spouse had before you married? If you had your name added to the account, you are also responsible for that debt, even the amount that was already on the account at the time of your marriage.


After seeing how debt is treated in a community property state, you may begin to see how it treats property as well. If you and your spouse bought property, no matter who's name is on the property, it is equally both of yours. Property that you brought into the marriage with you is exempt and, if the property was given as a gift to only one you, that is the recipient's alone. It doesn't matter whose money bought the property, it is equally you and your spouse's. This facet of community property law can help even the playing field for a spouse who did not earn much during the marriage and accrued little property.

There are nuances to the above rules for community property, so be sure to discuss your particular situation with a divorce attorney like those at Hackworth Law.