Property and debt division

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Updated: 4/13/2007 3:35 pm
It's common for a divorcing couple to decide about dividing their property and debts themselves, rather than leave it to a judge. However, if a couple can't agree, they can submit their property dispute to the court, which will use state law to divide the property. Division of property doesn't necessarily mean a physical division. Instead, the court awards each spouse a percentage of the total value of the property. Each spouse receives items whose worth adds up to his or her percentage. Courts divide property in one of two ways: equitable distribution or community property. In equitable distribution, assets and earnings accumulated during marriage are divided fairly. Often, two-thirds of the assets go to the higher wage earner and one-third to the other spouse. All debts incurred during a marriage are divided fairly, as well. Equitable distribution principles are followed in 41 states. The other nine states--Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin--are community property states. In these states, all property of a married person is classified as either community property, which is owned equally by both spouses, or the separate property of one spouse. Community property is generally divided equally between the spouses while each spouse keeps his or her separate property. Debts incurred during the marriage are divided equally upon divorce unless the debt specifically is related to a spouse's separate property.
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