Many married couples grapple with debt, and disagreements over money are one of the primary reasons marriages end. In some instances, one party will lack the ability or desire to pay down debts, and the other party will use their separate property to pay community debts while a divorce is pending. In such cases, a court may choose to grant reimbursements or credits via what is referred to as Epstein & Jeffries credits and Watts charges, but they are not required to do so. If you have questions regarding your rights and obligations with regard to the payment of joint debts, it is smart to meet with a California divorce attorney as soon as possible.
Epstein & Jeffries Credits and Their Use in California Divorces
The term Watts Eppstein & Jeffries credits come from a 1979 California case, Marriage of Epstein. In that case, the court ruled that a spouse who pays community debts or expenses using their separate funds after they separate from their spouse is entitled to receive reimbursement for the other party’s share of the debt. For example, if a couple has a mortgage on the marital home, but only one spouse contributed towards the payment of the mortgage after the couple separated, the courts may order reimbursement to the paying spouse.
The California Family Code was later modified to reflect the court’s authority to order such payments. Notably, however, the courts are not required to issue Epstein and Jeffries credits in all cases; for example, they may reject a reimbursement request if the payments in question were made in replacement of support or other court-ordered obligations. Parties seeking such reimbursement must present their claim through a declaration setting forth the balance of the debt on the date of separation, the amount and dates of post-separation payments, the source of such payments, and any documentation supporting the claim.
How Watts Charges are Used in California Divorces
A Watts credit or charge is a charge by one spouse against the other for the use of a community asset after the date of separation. Watts charges arise out of a 1985 California case, Marriage of Watts. The value attributed to the use of the community property is the basis of a Watts charge. A court may decline to impose a Watts charge if the parties had an agreement that would negate it, the value of the property in question was taken into consideration when making a support determination, or the charging spouse granted the other spouse use of the property as a gift.
Meet with an Experienced California Family Law Attorney
It is not uncommon for one party in a failed marriage to bear more financial responsibility, but they should not be penalized for choosing to pay joint debts with their separate property. If you are interested in learning more about the financial impact of divorce and Epstein & Jeffries credits and Watts charges, it is in your best interest to meet with a divorce lawyer. The experienced family law attorneys at the Bay Area Family Law Center can assess the facts of your case and inform you of what measures you can take to protect your interests. You can reach us at 925-258-2020 or through the form online to set up a conference.
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