Divorce and Family Law
Reimbursement Credit
Joint Credit Cards
(Community Property v. Contract Law):
Consistent with the foregoing, a debt incurred after the DOS is the separate obligation of the incurring spouse under community property law. A different wrinkle under contract law is added when such a debt is incurred on a joint credit card.
Under such circumstances, both spouses are jointly and severally liable for the obligation under the contract they signed at the time the joint credit card was issued. This means while a debt incurred against a joint credit card by one of the spouses is the separate obligation of that spouse under community property law, the creditor (normally the bank or department store) can go against the other spouse under contract law if the spouse incurring the debt does not pay it. In short, consider very carefully whether you want to cancel joint credit cards and credit lines.
Epstein Credit
There are many ways in which you can help. One such way is to keep your files well organized to support "Epstein credits" to which you may be entitled. Debts that exist as of the date of separation (DOS) are generally community debts regardless of which party incurred them. On the other hand, income earned by either party after the (DOS) is that person's separate property. To the extent income earned after the DOS (therefore separate income) is utilized to pay community debts, then (with certain exceptions) you would be entitled to reimbursement at the time of the division of community property. This reimbursement is defined as an "Epstein credit." It is helpful to think of it as separate property being used to pay community debts.
In order to prove these credits, you need to keep copies of the bills showing the amount of the indebtedness close to the DOS, with monthly statements thereafter and the cancelled checks that were used to make payments following the DOS. You would then be in a position to fill in the "Epstein Chart." An additional "accounting" problem arises when charges on a joint account are made after the DOS. The problem is that the allocation of the interest assessed against the separate charges as distinguished from the community charges is very difficult, if not impossible, to determine. The same problem arises when charges and subsequent payments after the DOS occur. Frequently, the judge in your matter will arbitrarily allocate the interest between the community and separate debt. To avoid this problem, it is best to make charges after the DOS on accounts which have no outstanding community indebtedness.
Quick Contact
