During divorce, debt division is just as important as property division

When it comes to divorce, dividing shared debts is just as important as dividing money and property – particularly in today’s tough economic climate, when many couple’s debts outnumber their assets. The laws that determine how debts and property are divided during divorce vary by state.

Texas property division

In Texas, family courts follow a system known as “community property” to divide a couple’s savings accounts and other assets during divorce. Under this system, all of the money, property and other valuable assets that either spouse acquires or generates during the marriage are treated as marital property. In contrast, the property owned by either spouse prior to marriage is generally considered separate property.

Upon divorce in Texas, as in other community property states, marital property is typically divided equally between the spouses, regardless of which party was responsible for contributing it. Separate property, on the other hand, is usually retained by the spouse who owned it originally.

Texas debt division

Under Texas law, debts are treated differently from assets during divorce, and the process of dividing debts can be considerably more complicated. Although debts incurred by either spouse during the marriage are typically regarded as community debt, they are not necessarily divided equally between the spouses upon divorce. Instead, family courts in Texas try to divide debts according to a principle of equity, or fairness.

With certain exceptions, a spouse who takes out a loan or other debt independently of his or her spouse may be held solely liable for the debt in the event of divorce. However, in order to avoid responsibility for a spouse’s debt after divorce, it may be necessary to present evidence in court to overcome a presumption of shared liability. In addition, depending on the circumstances, marital property may be subject to seizure by creditors in the event that a debt is not paid, even if the debt was incurred independently by one spouse.

Protecting yourself from a spouse’s debts after divorce

Generally speaking, it is wise to pay off or otherwise eliminate shared debts as quickly as possible when ending a marriage. If paying off the debt is not an option, some couples may opt to divide their debts and transfer them to separate credit cards or other accounts. Whenever possible, it is wise to cancel any joint credit cards or other lines of credit, and to keep detailed records of all charges in order to document whose debts are whose.

For more information about dividing debts during divorce in Texas, and for help protecting yourself from the debts of your spouse, contact an experienced divorce lawyer in your area.