How Debt is Handled in a Divorce

One aspect of almost every divorce is deciding how to separate the debt a couple has accumulated over the years. This may include credit card debt, mortgages, auto loans and other financial responsibilities. Dealing with debt in a divorce can get messy unless the two parties are in agreement.

Texas is a Community Property State

Only a few states are community property states, and Texas is one of them. In community property states, all debt is considered to be the property of both parties in the marriage and is divided up equally. This includes any debt that was taken on during the marriage even if by only one person. It does not account for which person has the highest income or other factors.

While equally dividing up the debt simplifies the process, it can provide a hardship to one person if they have a substantially lower income or have full custody of the children and more expenses.

How a home is disposed of in a divorce can be more complicated. The easiest solution is to sell the home and divide the profit equally. If the home and mortgage payments become the responsibility of one person, the other person may be required to take on other debt.

Exceptions

While equal division is the standard in a community property state like Texas, there are exceptions. If the two parties come together with their own preferences for how things are divided and they are in agreement, the judge will consider their wishes.

If the couple can't agree on how they want things divided, the judge may consider factors such as income discrepancy or other issues when making a decision. While the court may choose whatever distribution it believes is fair to both parties, it must have a basis for this decision. Which person is the primary caregiver for any children will be a factor as will any fault for the divorce.

Anyone who is considering a divorce and wants to alter the equal split of property would need to hire an attorney to represent their interests. While it is possible to alter the community property ruling, it isn't easy. An experienced attorney can put together a solid case as to why you should not have to take on certain debts. Divorce is often a much smoother process when an attorney is involved who will advocate for your interests.