CDA Debt Division & Credit Issues in Divorce Flashcards
6 cards from real CDA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CDA Debt Division & Credit Issues in Divorce flashcards as text
In a community property state, how is marital debt generally treated in a divorce?
Answer: All marital debt is divided equally (50/50) between the spouses
In community property states, debts incurred during marriage are generally treated as community obligations and divided equally between the spouses.
What is 'dissipation of marital assets' in the context of divorce?
Answer: The wasteful spending or destruction of marital assets by one spouse, typically during the breakdown of the marriage
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.
If a divorcing couple has a home equity line of credit (HELOC) secured by the marital home, how should it typically be handled?
Answer: It should be paid off at closing if the home is sold, or refinanced if one spouse retains the home
A HELOC is a lien on the property and must be paid off at sale or refinanced when ownership transfers to one spouse.
Which type of obligation related to divorce is generally NOT dischargeable in bankruptcy?
Answer: Domestic support obligations such as alimony and child support
Domestic support obligations including alimony and child support are explicitly non-dischargeable in bankruptcy under federal bankruptcy law.
What is the primary risk when a spouse accepts an asset offset to balance a joint debt the other spouse assumes in divorce?
Answer: If the debt-taking spouse fails to pay, the asset-receiving spouse may still face creditor claims on the joint debt
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.
When a spouse is ordered to pay the joint car loan in the divorce but it appears on both credit reports, what should the non-paying spouse monitor?
Answer: Payment status on the joint auto loan, since a late payment by the assigned spouse will damage their credit too
Since both spouses remain contractually obligated on the joint auto loan until refinanced, any late payment by the assigned spouse will appear on both credit reports.