Dividing debt during a Texas divorce can be challenging

On Behalf of | Jan 10, 2014 | Property Division

Property division is a very complex part of the divorce process here in Dallas. A number of married couples have very complicated assets that are not easy to split. And, not only are assets difficult to divide when a marriage ends, but so are debts.

Credit card debt, student loans, mortgages and home equity loans are among the debts that many married couples share. When marriages come to an end in Texas, the law generally holds that assets and debts accrued during the marriage should be divided equally.

It is often not so clear, however, which debts are marital property and which debts are separate property. A mortgage taken out during marriage is likely very clearly a marital debt, but what if one spouse took out the mortgage alone, several years before the marriage? Or what if a person had a personal credit card that began being used as a joint credit card after marriage?

As you can see, the lines between separate and marital debts are often blurred. And, Texas law on this matter is not black and white. Texas law states that property must be divided equitably during divorce; this means not that assets and debts should be divided 50/50, but that they should be divided fairly and reasonably.

Residents of Texas need to work with their family law attorneys to ensure that their debt is divided equally during divorce. It is important to be aware that the division of debts between divorcing spouses does not actually change a creditor’s right to collect a debt. For example, if a car loan is in a wife’s name, but that debt is assigned to the husband during divorce, the wife could still potentially be held liable for the debt post-divorce. It is important to talk to divorce attorneys about not only separating debt, but also about protecting oneself from liability for any debts that are assigned to one’s ex in a divorce decree.

Source: Forbes, “Are Student Loans Incurred During The Marriage Considered Marital Debt?” Jeff Landers, Dec. 17, 2013