Property division often takes center stage during divorce, but debt allocation holds equal significance. If you’re dissolving a marriage in Texas, you need to understand which obligations qualify as marital debt and how courts assign responsibility.
Community vs. separate debt
In Texas, debts incurred by either spouse during the marriage are typically considered community debt. This includes credit card balances, auto loans, or mortgages initiated while married. Even if an account is solely under one name, it may still be deemed community debt if it served mutual interests or benefited the household.
Conversely, separate debt encompasses obligations acquired before the marriage or debts linked exclusively to one spouse’s separate property. For instance, a loan taken to renovate a home owned prior to the marriage may remain the sole responsibility of the original owner. Courts may also classify debt from personal indulgences or extramarital affairs as separate and assign it accordingly.
How courts divide debt
Texas applies community property principles, though this doesn’t guarantee an even split. Courts strive for an equitable distribution, taking into account each party’s income, property holdings, custodial responsibilities, and the conduct that led to the divorce. A spouse with a larger income or who retains a greater portion of the assets may be assigned a larger share of the debt.
While a divorce decree may allocate responsibility for certain debts, it doesn’t alter the contractual obligations with creditors. If both names remain on a loan, the creditor can legally pursue either party for repayment, regardless of the court’s division.
Ways to protect yourself
Compile a comprehensive list of debts and verify whose names are associated with each account. When feasible, close or restrict access to joint credit cards. Consider refinancing loans into one party’s name to isolate liability. If refinancing isn’t possible, ensure the court order clearly assigns responsibility—and monitor accounts to avoid fallout from missed payments.
Debt division directly impacts your post-divorce financial health. By grasping how Texas law treats marital debt, you can better protect your interests and reduce future complications.
