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What debts are subject to division in a Texas divorce?

On Behalf of | Jan 23, 2024 | Divorce |

The division of marital property is often one of the biggest challenges during a Texas divorce. While Texas is a community property state, the division of resources is not necessarily fast and easy.

The Texas community property rules do not always require an even split of resources. Instead, judges have to look at the circumstances of both spouses, the duration of the marriage and the contributions each party made to the marital estate to decide what is reasonable. Not only do assets and income from during the marriage matter but so do debts. Financial obligations can have a major impact on the division of marital property during a Texas divorce.

What debts are typically subject to division at the end of a Texas marriage?

Most debts accrued during a marriage are divisible

People sometimes oversimplify Texas property division. They might assume that each spouse has financial responsibility for the debts in their own name. However, that is not typically how Texas handles property division matters.

Instead, when people acquired their debts can be far more important than the name of the account holder. A credit card in the name of one spouse that the family used to pay for groceries or utility bills is very likely part of the marital estate. Even student loans taken out during the marriage could be subject to division during the divorce if someone intended to use their education to better support the family.

There are some debts that people can exclude from consideration during a divorce. Financial obligations that predate the marriage usually remain the separate responsibility of one spouse. So do any debts that either spouse could claim represent the dissipation of marital assets.

Some people spend money wastefully toward the end of a marriage as a means of punishing their spouse or diminishing the value of the marital estate. Occasionally, the courts may agree to exclude debts taken on in secret due to financial infidelity. If one spouse lied about their financial habits and did not disclose their spending to the other, then those hidden debts might remain the separate property of the spouse who accrued them. Finally, if a debt relates to an extramarital affair that eventually triggered the divorce, the use of marital assets to conduct the affair could impact whether the courts include those amounts in the marital estate.

There are many different ways for couples to handle shared financial obligations in a Texas divorce. Each spouse might accept a certain amount of the debt, or they might agree to use marital assets to pay the debt in full before the end of the divorce. Different situations require different solutions based on the needs and resources of the divorcing spouses. Understanding what debts may be subject to division may help people better prepare for property division in a Texas divorce.