Texas Divorce 101 – Division of Debt Isn’t Always Equal!

In this 7-part series about divorce in Texas, the division of marital assets is certainly not the only financial element that divorce lawyers must help their clients resolve, as marital debt must be dealt with as well.

Just as marital property is not always evenly divided 50/50 in a community property state, family law attorneys point out that the same is true for debt as well.

Attorneys find that the concepts of debt and who bears responsible for it are often misunderstood, leaving many divorcing couples surprised as to who is responsible for what once the final decisions have been made.

Community Property, Community Debt, And Then Some

Texas family law looks at marital debt in the same way that it does marital property: whatever has been accrued during the marriage is the responsibility of both parties.

While this may be an expected approach that each spouse should be responsible for half the marital debt, divorce lawyers frequently find their clients are surprised to learn that a spouse could also end up partly responsible for a personal debt incurred by the other spouse.

In other words, both spouses did not have to sign on the dotted line for them to both be responsible.

Generally speaking, whatever debt was taken on during the marriage is considered community debt and both spouses must repay it.

Debt Assignments, Default, And Creditors

Another surprising fact that divorce attorneys help their clients to understand is how debt assignment in the divorce decree does not change agreements made to creditors at the time that debt was taken on.

Creditors retain the legal right to seek compensation from a divorced spouse should their ex-spouse stop making payments, even if the divorce decree relieves them of that responsibility and documents the other spouse as the responsible party.

Although a spouse could end up paying for debt that they didn't incur, there is some recourse.

With the help of his or her family law attorney, a breach of contract could be filed against the former spouse who was deemed responsible for the debt and defaulted.

Of importance to note is that while such actions are going on, the absolved spouse may need to continue paying the debt to avoid affecting their own credit.

Avoiding Debt Repayment Problems In Divorce

Considering the potential issues that divorcing couples can face when dealing with marital debt and how repayment might be assigned in the divorce decree, the recommendation from most divorce lawyers is to divide up debt beforehand.

Such action may take the help of an attorney to handle those kinds of negotiations; however, dividing up debts fairly and transferring them into one spouse’s name reduces the likelihood that this debt can become problematic after the fact.

Accomplishing this requires a willingness to compromise on actually dividing that debt and the ability to fairly assume a rightful part of it, whether that is more or less than a 50/50 split.

Handle Marital Debt With A Divorce Lawyer

Just like dividing up marital wealth, doing the same with a couple’s debt is yet another important part of ending a marriage.

To avoid the all-too-common pitfalls that can come when dividing up debt, divorce lawyers recommend that couples negotiate beforehand and then legally debt so it is no longer a factor within the actual divorce.

Family law attorneys see many times how the fight over debt can become just as challenging as the one over wealth.

Anyone facing a divorce on the horizon should speak with an experienced divorce attorney about the financial issues involved before starting the process so solutions can be found to remove debt from the equation whenever possible.

Check back soon for the next installment in our Divorce 101 series!