Debt in Divorce Mediation: How California Couples Divide What They Owe

In a California divorce, debts you and your spouse took on during the marriage are generally community debts, divided equally unless you agree otherwise in writing, while debts from before marriage or after separation generally stay with the spouse who incurred them. Mediation lets you two work out that division together.

Most people facing this question are looking at a stack of statements: a mortgage, a couple of credit cards, a car loan, maybe student loans that one spouse brought into the marriage. Some accounts are in both names, some are in one name, and it is hard to tell which ones the two of you share. Underneath that is a second worry. If one of you agrees to pay a card, what happens if the payments stop? Both questions have real answers in California law, and both shape how a debt conversation goes in divorce mediation.

This guide walks through how California sorts debt into community and separate, which debts usually land where, how mediation handles debt alongside the required financial disclosures, why a creditor may not be bound by what you and your spouse agree, and how a mortgage on the home fits in. It is written for couples in San Diego County and for couples anywhere in California who are mediating online.

How California Law Characterizes Debt: Community and Separate

California is a community property state, and that rule reaches debt as well as assets. A community debt is a debt the marriage as a whole is responsible for, generally because it was incurred during the marriage. A separate debt is a debt that belongs to one spouse alone, generally because it was incurred before the marriage, after separation, or during the marriage but not for the benefit of the community.

The dividing line in time is the date of separation. Under Family Code section 70, it is "the date that a complete and final break in the marital relationship has occurred," shown by both of two things: one spouse "has expressed to the other spouse the intent to end the marriage," and that spouse's "conduct... is consistent with the intent to end the marriage." The court considers all relevant evidence in deciding that date. Couples sometimes remember it differently, and in mediation the two of you can talk through the facts and try to agree on it.

What decides a debt's character is when it was incurred and why, not whose name is on the account. A credit card in one spouse's name, used during the marriage for household expenses, can be a community debt. A loan in both names can still raise questions if it was taken out after separation.

Character is about the spouses dividing debt between themselves. It does not decide what a lender can do. Under Family Code section 916, discussed in its own section below, a spouse generally stays liable to a creditor for a debt that spouse incurred, even if the divorce assigns that debt to the other spouse.

What Counts as a Community Debt in California

The starting rule appears in Family Code section 910: except as a statute expressly provides otherwise, "the community estate is liable for a debt incurred by either spouse before or during marriage," regardless of which spouse manages the property or signed for the debt. The same section says "during marriage" does not include the period after the date of separation and before judgment.

Debts often treated as community, depending on when and why they were taken on, include:

• a mortgage on a home bought during the marriage
• credit card balances run up during the marriage
• car loans taken during the marriage
• medical bills from the marriage
• personal loans used for the household

None of these is automatically community just because it is on the list, and a debt in both names is not automatically community either. The timing and purpose still matter.

At division, community debts are generally divided along with community assets. Family Code section 2622 says debts incurred after marriage and before separation are divided under the equal-division rules, and when community debts exceed total community and quasi-community assets, the excess is assigned as the court deems just and equitable, considering factors such as the spouses' relative ability to pay. The equal-division rule itself, in Family Code section 2550, applies "except upon the written agreement of the parties, or on oral stipulation of the parties in open court," or as the division otherwise provides. That written-agreement exception is part of why mediation can work for debt: the two of you can agree to a different arrangement.

Value is measured close to the end, not at separation. Under Family Code section 2552, the court values assets and liabilities as near as practicable to the time of trial, and on 30 days' notice by the moving party it may, for good cause, use a date after separation and before trial.

Debts for necessaries of life, meaning basic needs such as food, shelter and medical care, follow an added rule. Family Code section 914 makes a married person personally liable for a debt the other spouse incurred during marriage for that spouse's necessaries of life before separation, and, with a limited statutory exception, generally for the other spouse's common necessaries of life after separation. That spouse's separate property can be used to pay it.

What Counts as a Separate Debt

Debts from before the wedding stay with the spouse who took them on. Family Code section 2621 says debts incurred before marriage "shall be confirmed without offset to the spouse who incurred the debt." "Confirmed without offset" means the debt is assigned to that spouse without a credit against the other spouse's share.

Debts after separation follow Family Code section 2623, which covers the period from the date of separation to judgment. Debts for the common necessaries of life of either spouse, or the necessaries of life of the children of the marriage, are confirmed according to the spouses' respective needs and abilities to pay when the debt was incurred, if there was no court order or written agreement for support or for paying those debts. Debts for nonnecessaries of a spouse or the children are confirmed to the spouse who incurred them, without offset.

Some debts from during the marriage are separate too. Family Code section 2625 says all separate debts, "including those debts incurred by a spouse during marriage and before the date of separation that were not incurred for the benefit of the community," are confirmed without offset to the spouse who incurred them. A loan taken to buy or improve one spouse's separate property is an example couples often look at closely, since the question is whether it served the community or only that spouse's separate estate.

Student loans have their own rule. Under Family Code section 2641, a loan incurred during marriage for one spouse's education or training is not treated as a community liability and is assigned for payment by that spouse. The same section also says the community is reimbursed, with interest at the legal rate, for community payments toward education or training that substantially enhances that spouse's earning capacity, including community payments on the loan. Both the assignment and the reimbursement are reduced or modified to the extent circumstances make them unjust, and the statute gives examples of such circumstances. Family Code section 2627 confirms that educational loans are handled under section 2641 rather than the general debt rules. So a student loan is generally assigned to the spouse who got the education, but the result depends on the couple's facts.

Sorting your debts into these categories can feel like reliving the marriage account by account. It helps to know that most of the work is factual: dates, purposes and statements, which the two of you can gather and look at together.

How Debt Division Works in Mediation

Mediation, as Evidence Code section 1115 defines it, is "a process in which a neutral person or persons facilitate communication between the disputants to assist them in reaching a mutually acceptable agreement." The mediator is that neutral person. In a divorce, the mediator helps you and your spouse communicate as you list each debt, discuss whether it is community or separate, and work toward a division you both accept. The mediator does not represent either of you, does not act as either spouse's lawyer and does not decide anything. Either of you may have your own attorney.

Mediation does not replace the financial disclosures California requires. Under Family Code section 2104(f), the petitioner serves a preliminary declaration of disclosure with the petition or within 60 days of filing it, and the respondent serves one with the response or within 60 days of filing it, unless the parties extend that time by written agreement or the court extends it by order. When the petitioner served the summons and petition by publication or posting under a court order and the respondent files a response before a default judgment is entered, the petitioner has 30 days from that response. The disclosures cover debts as well as assets, which gives both of you the same picture before you start dividing.

The final declaration of disclosure comes later. Under Family Code section 2105(a), except by court order for good cause, each party serves a final declaration of disclosure and a current income and expense declaration before or at the time the parties enter into an agreement resolving property or support issues other than temporary support, or, if the case goes to trial, no later than 45 days before the first assigned trial date, unless the parties mutually waive the final declaration. Under section 2105(d), that mutual waiver must be executed under penalty of perjury in open court or by separate stipulation and must include the representations the section lists. One spouse cannot waive it alone.

Mediation is confidential under Evidence Code section 1119, except as the Evidence Code's mediation chapter otherwise provides. That protection is not absolute. Under Evidence Code section 1123, a written settlement agreement prepared in the course of, or pursuant to, a mediation and signed by the settling parties can be admitted or disclosed if any of these conditions is met: it says it is admissible or subject to disclosure, it says it is enforceable or binding, all parties expressly agree to its disclosure, or it is used to show fraud, duress or illegality relevant to an issue in dispute.

Where a case is filed depends on meeting California's residency requirement for the county. Couples who meet it in San Diego County file with the Superior Court of California, County of San Diego, and couples who meet it elsewhere in the state can mediate online and file in their own county. When the two of you reach a full agreement, a divorce mediation agreement is what puts it in writing.

The Creditor Problem: Why Your Agreement Doesn't Bind the Bank

Who pays which debt between the two of you is one question, and who a lender can collect from is another. A divorce settles the first question but not always the second.

Family Code section 916 sets the rule after property is divided. Each spouse's separate property, and the property that spouse receives in the division, stays liable for a debt that spouse incurred before or during marriage, and the spouse stays personally liable for it "whether or not the debt was assigned for payment by the person's spouse in the division." On the other side, a spouse is generally not liable for a debt the other spouse incurred unless the division assigned that debt to them. The section also says it does not affect a lien on property.

In practice, if you both opened a credit card and your mediated agreement assigns it to your spouse, the card issuer, which was not part of your agreement, can still look to you if the payments stop. The agreement controls between the two of you. It does not erase what you owe the lender on a debt you incurred.

Couples work with this in a few common ways. Some pay off joint balances before or as part of the settlement. Some refinance a joint debt into the name of the spouse who will keep it, when the lender allows that. Many include indemnification language, meaning one spouse agrees to hold the other harmless, or cover them, if a creditor comes after them for a debt assigned to the first spouse. Indemnification gives the spouses a remedy against each other, but it does not stop the creditor from collecting. No single approach removes every risk, and which ones fit depends on the debts and the lenders involved.

This is often the point where the conversation feels most uneasy, because it depends on trusting the other person to keep paying. Naming that worry openly in mediation tends to make the options easier to weigh.

Debts Tied to Property: Mortgages and Secured Loans

A mortgage is both a debt and a lien on the house. A lien is the lender's legal claim on the property until the loan is paid. Because the two travel together, whichever spouse keeps the home usually takes on the mortgage, and the lien stays with the house no matter what the agreement says (Family Code section 916 leaves liens unaffected).

When a home was bought during the marriage with community funds, the house and its mortgage are generally both community. What gets divided is mainly the equity, measured close to the time of trial under Family Code section 2552.

Separate money put toward a community home can be reimbursed. Under Family Code section 2640(b), unless a spouse made a written waiver of the right to reimbursement or signed a writing that has the effect of a waiver, that spouse is reimbursed for contributions to the acquisition of community property traced to a separate-property source; the reimbursement is paid without interest or adjustment for change in monetary values and may not exceed the property's net value at the time of division. Section 2640(a) defines those contributions as downpayments, payments for improvements and payments that reduce the principal of a loan used to buy or improve the property, not payments of interest, maintenance, insurance or taxes.

The reverse case is different. When community money paid down the principal on a loan secured by one spouse's separate-property home, California courts apply what is often called the Moore/Marsden approach. In plain terms, as the community pays down that spouse's separate-property mortgage, the community gains a proportional interest in the home. This is a separate doctrine from section 2640 reimbursement, and the calculation depends on the facts.

How the home and its loan are handled in mediation depends on the equity, what each of you wants for the property and what the lender will allow. The mediator helps the two of you talk through options such as one spouse keeping the home and refinancing, or selling it and paying off the loan. More on these choices appears in the guides on the house in divorce mediation, property division mediation and, where a loan is tied to a company, business owner divorce mediation.

If You'd Like to Talk Through the Debts You Share

Debt is often where a divorce feels most personal, because it ties each of you to choices made together and to payments that continue after the marriage ends. A consultation is a place to ask how mediation could work through your debts: how the date of separation affects them, how disclosures fit in, and what options couples consider when a joint account cannot simply be split. Simple Divorce Mediation works with both spouses as a neutral and does not take either side or decide for you. If there has been domestic violence, coercion or a protective order, safety comes first, and mediating with the other spouse may not be appropriate.

When the two of you are ready, call Simple Divorce Mediation at 858-330-1378 to arrange a joint mediation consultation about mediating your divorce in San Diego County or online anywhere in California.

About this article. Reviewed by Amy J. Lass, CA Bar No. 246779. Last updated 2026-10-08.