Debt Division and Asset Protection by State

When a married couple is unable to divide their property and debts by themselves, then it is up to the state courts to divide the property. There are two primary schemes that the courts use: Community Property and Equitable Distribution.

Community Property law states that all property of each married party is considered either community property, which is equally owned, or property owned separately by each party. During the divorce process, all community property is distributed equally, and each spouse keeps their own separate property. States that use the community property scheme include: Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin, and Puerto Rico.

Equitable Distribution law states that any debts and assets that were accumulated during the marriage are divided equitably. The equitable distribution scheme is different from community property in that equitably means fairly, not equally. In most cases, two-thirds of all debts and assets will be awarded to the spouse who earns more. All other states follow this scheme.