When couples divorce, people typically focus on issues like asset division and child custody. However, the division and allocation of debts can have a significant effect on the size of the property settlement you receive. You may think that just because you didn’t co-sign for a credit card, you won’t be responsible. The courts in Texas, however, have a different view when it comes to financial responsibility and fair division of both assets and debts in a divorce.
Let’s say that your former spouse completed school before you were married. Chances are, those debts won’t affect your community property settlement. But if your former spouse took out those student loans during your marriage, you may incur liability for a substantial amount of that debt. Texas law leaves it up to the courts to interpret what is the fairest way to split up both assets and debts. They won’t just look at amounts and who benefited. The courts will also look at who has greater earning potential and at the reason for divorce. Fault can result in more uneven distribution of debts.
You may have to share some of your spouse’s debts
If you were married when your former spouse was wracking up credit card debt, medical debt or student loans, you could very well end up paying for some of those debts. Texas is a community property state for purposes of asset and debt division. Assets and debts acquired during the marriage are generally split evenly between spouses, while most assets and debts from before the marriage remain the possession of one spouse. Even if you weren’t buying anything with that credit card or didn’t co-sign for the student loans, if the debt was created during the marriage, you may have to share it.
It is important to note that Texas law does protect divorcing individuals from a spouse taking on new debt after someone files for divorce. The courts may intervene in certain situations, like the sale of a home, major credit card purchases or similar situations intended to cause financial hardship for the other spouse. These situations can be very difficult to handle, however, so it is critical that you work with an experienced divorce attorney if you face this kind of issue.
An attorney will fight for a positive outcome
Whether you’re trying to ensure a fair split of credit card debt or ensure your former spouse’s pre-existing student loans don’t become your issue, the help of an attorney is critical to a positive outcome. Your attorney can review your financial information, including information about your debts, and determine what your best options will be as you move through the process of divorce.