When going through a divorce, it’s easy to become fixated on the final result. But the reality is that a lot can happen between the date of separation and the date the divorce decree is issued. Debt doesn’t go away – it remains during the divorce process and must be dealt with, while it’s further complicated by the separation itself.
Epstein Credits explained
Property division is one of the big issues which needs to be resolved during a divorce. But it’s not limited to dividing assets, like the family home or a car – debts are also part of the equation. And those debts don’t disappear just because the couple separates. The bills must still be paid. Who pays them, and under what circumstances, are what give rise to what’s known as Epstein Credits.
Imagine a situation where one spouse, who is the primary breadwinner, moves out of the family home upon separation. Meanwhile, the non-breadwinning spouse remains in the home and cares for the children. The breadwinning spouse continues to pay the mortgage – that mortgage debt is community property and both spouses own half of it. The breadwinning spouse is effectively paying not only their own share of the debt, but also the half owned by the non-breadwinning spouse.
An Epstein Credit is a form of reimbursement. It entitles a spouse to be paid back when they use separate property (in this case, their income) to pay a community debt (the mortgage). California gives family courts the power to order reimbursement for debts paid after the date of separation – the Epstein Credit is one example of this.
Post-separation debt and Epstein Credits are a complex area of California divorce law and difficult to figure out on your own. To determine how they should be dealt with, speak to a professional who is experienced in family law and the divorce process.
