Dividing marital property includes distributing assets and assigning financial liabilities such as credit card balances, auto loans, and mortgages. Texas law uses the community property system to determine how to divide debt.
Community and separate debt distinctions
Texas law treats most debts taken on during the marriage as community debts, regardless of the name on the account. These obligations usually fall on both spouses unless one person can prove the debt only benefited them and not the marital estate. Debts from before the marriage usually stay with the person who created them.
Determining the type of debt can get complicated. If one spouse opened a credit card during the marriage and used it to support the household, the court may treat that debt as community property. Judges evaluate the debt’s purpose and who benefited from it when deciding who takes responsibility.
Judicial division of debt
Texas courts divide the marital estate, including debts, in a way they find “just and right.” This division doesn’t mean a 50/50 split. Judges factor in income, financial needs, responsibility for children, and even fault in the divorce. A spouse who keeps more assets might also take on more debt to balance things out.
Courts can assign community debt to one spouse, but creditors still have the right to collect from anyone named on the account. Divorce decrees don’t change the terms of the original loan or credit agreement, so both parties might remain legally responsible.
Risk mitigation strategies
During the divorce process, check your credit report and list all debts. Close or freeze joint accounts to prevent new charges. Refinance shared debts so each account belongs to only one person.
Spelling out who pays which debts in the divorce decree can help clarify expectations between ex-spouses, even though it doesn’t affect the creditor’s rights.
A more informed approach
Texas law gives you a clear structure for dividing debt in divorce. By preparing thoroughly and reaching specific agreements, you can reduce the chances of future financial disputes.
