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Who gets custody of the debt in a Louisiana divorce?

On Behalf of | Jul 22, 2019 | Firm News |

Louisiana is what’s commonly called a “community property” state meaning that you and your spouse own half of everything, whether it’s assets like cash and houses or it’s debt like credit card balances and student loans.

As usual with legal questions, there are certain exceptions and a few things you can do improve your prospects if you know the law or a good attorney.

Equal division of the marriage’s community assets

In Louisiana, the law takes the community property principle seriously. The property of the marriage is owned by both you and your spouse equally. If marriage makes two people one, you can think in terms of both of you owning 100 percent of the property.

When you divorce, the court needs to figure out how to split things up equally.

This can obviously be a challenge, as when there’s only one Picasso painting and little else of value in the marriage. Possibly, in such a case, the court would order the painting sold and the proceeds split by simply dividing the sale price by 2. Another option would be to simply go on owning half the painting, just as you might with a business partner or a sibling.

The principle, of course, is that the state usually will not budge on the equal division of assets.

Debt included

This approach carries over to debt as well as assets. You can divorce your spouse but not your shared debt.

The mortgages you signed and the car payments you took on are also probably going to be divided up. So, if one of you went into debt to take that Picasso home, you now go your separate ways but you’ll likely take half of the debt along with you.

Exception may bring good or possibly bad news

There are certain categories of property (and debt) that you probably won’t be saddled with when you return to being single.

If your spouse had loan debt when you got married, your spouse will probably take all of that loan debt away for themselves after the divorce.

Similarly, if your spouse owned a lake cabin in the Piney Woods before the marriage and you never signed on to joint ownership, that cabin walks away with the spouse. Inherited assets also behave this way, so that rich uncle’s fortune you inherited during the marriage might be able to stay yours.

A last exception to these generally strict rules is that the judge will be guided by their best judgment in making these goals a reality.

For example, imagine that your spouse would be glad offer up that inherited lake cabin you love so much if they can walk away with the painting you bought together. If you both like the idea, and the judge agrees that it would advance the goal of equal separation, they might approve that agreement.