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Understanding debt division during a Texas divorce

On Behalf of | Jun 8, 2023 | Property Division

Divorce is not just the separation of two lives; it also involves the division of shared assets and debts. The process of debt division can be complex, with various factors influencing who assumes responsibility for what.

It is crucial for divorcing individuals in Texas to understand how the state handles this important issue.

Division of debts in Texas

Texas follows the community property rule for divorce, which typically means that all assets and debts acquired during the marriage belong equally to both spouses. Thus, both parties share responsibility for the debts, regardless of whose name appears on the loan or credit card.

Student debt

In Texas, courts usually assign student debt to the individual who acquired the education. If the education significantly increased the couple’s earning potential during the marriage, the court might decide to divide the debt.

Credit card debt

Credit card debt is usually divided equally if accrued during the marriage, regardless of whose name is on the account. If one spouse can prove that the other incurred certain debts without their knowledge or for non-marital purposes, the court might assign the debt to the spending spouse.

Mortgage debt

Mortgages are typically shared debts in a divorce. The court might order the spouse who keeps the marital home to assume the mortgage. If neither spouse can afford the mortgage on their own, they might have to sell the home and divide the proceeds.

Personal loans

Similar to other forms of debt, the court will typically divide personal loans acquired during the marriage equally. However, if the loan was for the benefit of one spouse only, the court might assign it to that spouse.

Dividing debts in a divorce can be a complicated process in Texas, particularly when considering various types of debt. Understanding how the state handles debt division can aid individuals in navigating their financial responsibilities during divorce. It is important to remember that every divorce is unique, and multiple factors will influence the court’s decision.