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What happens to debt in a divorce?

Contrary to some beliefs, getting divorced in a community property state does not mean that any debts incurred during the marriage get split 50/50. Texas' community property laws start with the assumption that property acquired during the marriage belongs to both spouses, but it also includes several exceptions and qualifications. The same is true for debt.

Types of property

In addition to community property, spouses can have separate property, mainly consisting of assets they had from before the marriage. There is also special community property, which is acquired during the marriage but which would have been just yours if you hadn't married. This includes income from separate property and earnings.

Types of debt

There are two basic ways to owe money. The first is by borrowing money from a person, bank or company. The other is when someone sues you and gets a court judgment for a sum of money. The first kind of debt is connected to an asset, which is the thing that you borrowed the money to pay for. Responsibility for debt in a divorce typically depends both on the kind of debt and on the asset it is attached to.

Joint debt

The type of debt that courts most often do end up splitting down the middle is incurred for joint expenses. One kind of joint expense includes necessities, which generally include housing, food, clothing, transportation, medical care and education for the spouses and their children. Depending on the circumstances, other things can be necessities, too. Because both spouses are responsible for providing these things, th ey are equally liable for resultant debt, even if only one spouse signed the credit card agreement.

Another type is when one spouse takes out debt acting as the other's agent. This includes debt taken out to buy something for one spouse with the agreement of the other, or something for both of them that does not happen to be a necessity. Because the spouse who did not sign the agreement gave the signing spouse authority, this debt is his or her responsibility as well.

Separate debt

On the other hand, a spouse who decides to go into debt for a purchase that is not necessary for the household or isn't authorized by the other spouse bears full legal responsibility for it. While creditors can go after community property, they cannot touch the other spouse's special community or separate property. However, when one spouse owes money as a result of a judgment, the other spouse's special community property is also on the hook.

While these are the general rules, there are many factors that go into debt division. Even if the two of you agree about how you want to divide everything, some things may not be in your control, and others may have complexities you are not aware of. A qualified divorce attorney can help you make informed decisions that are in your best interest.

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