I was accidentally overpaid and my wife spent the money that the company wants back. Who is responsible for this debt?

Divorce Attorney Angela FoyQuestion:

While I was recovering from surgery, my job accidentally was overpaying me without my knowledge since I was confined to the hospital. My wife noticed this in our account though, hid any evidence of this and spent most of the extra pay.

Now my company wants that money back but she has left and filed for divorce. She refuses to pay me that money back so I can give it to my company. Who is responsible for this debt?

Answer:

Exactly who the debt belongs to and how it will be allocated in the property division depends on many details, and the laws in California. In most jurisdictions, the court would presume that since you were married at the time this occurred, you both enjoyed the benefit of the overpayment and now you both should bear the burden of the associated debt. I do not practice in California, so I can only speak in generalities based on my experience.

At the time of a divorce, in most jurisdictions the court presumes that the all marital property will be split equally, both the assets and the debts. However, the court may deviate from this presumption for many reasons.

One reason may be that one party has wasted or squandered assets and that those actions were unreasonable. This is commonly referred to in court as marital waste.

Additionally, the court presumes that the overall division will be fair and equal, but that does not necessarily mean dividing each debt. The court may assign you the debt to your employer, since it is your employer, and assign other debt to your spouse or additional assets to you to offset the debt.

Another issue that the court will look at is where and how the money was spent. It is typical for the court to allocate the debt and the corresponding assets.

For example, if one party is awarded the house, they are also responsible for the mortgage. If one party uses a credit card to purchase a new television, that party could be awarded the television and the associated debt.

Based on what you have said, this issue definitely should be raised in your divorce action.  How strong your case is depends on where you are in the divorce process, the supporting evidence that you have, the facts surrounding other issues in your case, and the specific rules in your jurisdiction.

I do not practice in California, so I cannot inform you as to the state’s specific laws. I recommend that you consult a domestic litigation attorney in your jurisdiction.

 

Angela Foy is an Associate Attorney in the Milwaukee, Wisc., office of Cordell & Cordell where her primary practice is exclusively in the area of domestic relations. Ms. Foy is licensed to practice in the state of Wisconsin, the U.S. District Court, and the Eastern District of Wisconsin. 

 Ms. Foy received her Bachelor’s and Master’s Degrees from the University of Notre Dame. She then continued on to receive her Juris Doctor from Marquette University.

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