At the end of a marriage, allocating debt and dividing assets are generally resolved through family law proceedings before a California judge. Unmarried couples, however, face significant hurdles when resolving debt issues without the built-in protections that a family law attorney in Arcadia would typically navigate during a divorce.
A person’s conscience, instead of the law, may dictate debt payment. Credit cards are a prime example. When a partner accumulates debt on their ex-spouse’s credit card, the ex-spouse is responsible for paying it off.
Car loans present similar challenges. When an individual co-signs a car loan for a vehicle belonging to their former partner, the co-signer remains liable for the debt if the former partner moves away or defaults on the payments. A former partner may file a lawsuit for unpaid debt; however, this process requires the payment of filing fees, and legal expenses may exceed the cost of retrieving the debt in many cases. If a partner is sued, they should not simply ignore the suit. Failure to answer a summons precludes later participation and defense against the complaint, making it critical to consult a civil litigation attorney in Arcadia.
Many of these issues may be resolved through open communication about finances early in the relationship. Discussions should cover matters such as rent or mortgage payments and expenses like food, housekeeping and entertainment. Determining whether financial contributions are gifts or loans is also important.
A written document, such as a prenuptial agreement or a cohabitation agreement, can help resolve these issues if a couple ultimately ends their relationship. This document operates like a contract that may be legally enforceable and clearly sets forth each partner’s financial responsibilities. These agreements also form the basis for identifying the couple’s assets and debts while encouraging a candid discussion about financial challenges.
Partners may also consider entering a joint venture when purchasing major assets such as a house. This could make one partner responsible for paying the mortgage while the other partner agrees to pay for home maintenance. Another joint venture is where a partner agrees to pay for the partnership in return for the other partner’s work.
An experienced family law attorney may assist partners with drafting these agreements and providing information on their options. They can also assist with seeking unpaid debt, property division and other legal matters if the relationship ends.