CDA CDA Debt Division & Credit Issues in Divorce 2

Question 1

In a community property state, how is marital debt generally treated in a divorce?

Accepted Answer

All marital debt is divided equally (50/50) between the spouses

Answer

In community property states, debts incurred during marriage are generally treated as community obligations and divided equally between the spouses.

Question 2

What is 'dissipation of marital assets' in the context of divorce?

Accepted Answer

The wasteful spending or destruction of marital assets by one spouse, typically during the breakdown of the marriage

Answer

Dissipation refers to one spouse's improper or wasteful use of marital funds or assets, typically during the period leading up to or after separation.

Question 3

If a divorcing couple has a home equity line of credit (HELOC) secured by the marital home, how should it typically be handled?

Accepted Answer

It should be paid off at closing if the home is sold, or refinanced if one spouse retains the home

Answer

A HELOC is a lien on the property and must be paid off at sale or refinanced when ownership transfers to one spouse.

Question 4

Which type of obligation related to divorce is generally NOT dischargeable in bankruptcy?

Accepted Answer

Domestic support obligations such as alimony and child support

Answer

Domestic support obligations including alimony and child support are explicitly non-dischargeable in bankruptcy under federal bankruptcy law.

Question 5

What is the primary risk when a spouse accepts an asset offset to balance a joint debt the other spouse assumes in divorce?

Accepted Answer

If the debt-taking spouse fails to pay, the asset-receiving spouse may still face creditor claims on the joint debt

Answer

An asset offset solves the equity problem between spouses but does not eliminate the joint creditor's right to pursue either party if the assigned spouse defaults.

(CDA) Certified Divorce Advisor Practice Test

(CDA) Certified Divorce Advisor Practice Test

CDA CDA Debt Division & Credit Issues in Divorce 2