How is Debt Divided in a divorce in Texas? Texas is a community property State. This means that property and debt gained during the term of your marriage is equally shared by both of you. The Texas court system attempts to divide the community assets and debt in a way that is just and right. This does not mean that everything will be divided 50/50.
How Debt is Divided
Any debt that was incurred by either of you prior to your marriage is generally your separate debt. Likewise, any debt incurred during your marriage is presumed to be community debt. To establish that property or debt is separate and not community property, you must show the court by clear and convincing evidence.
In most cases, the debt will follow the person who incurred the debt. If you maintain the home or a vehicle, you will likely be responsible to for the future payments of that property. If it is school debt for classes you took, the debt will usually be your responsibility.
It is best for you and your soon to be ex-spouse to sit down and deal with the debt. You may want to sell large items like houses or vehicles. This way you can resolve the debt. You also may be able to recover some equity. If you can agree who will maintain your outstanding debt, it will save you time and money in attorney’s fees.
As part of your divorce settlement, one of you will be responsible for any remaining debt. However, this does not free the other spouse from responsibility for the debt. If one of you defaults on the debt, your creditors will come after both of you.
If you allow your spouse to assume large debt such as a house, make sure they re-finance it. This will take you off of the loan and will not affect your credit.
If you are going through a divorce, your life is going to change. You may be hurt and upset during this transition. But it is not the time to just walk away. How the debt is divided in a divorce will be a factor in how long it takes you to financially recover from the separation.
Sit down with your Texas divorce attorney and go over all of the debt. They will help you understand how much of the debt will be yours after the divorce is final.