When you got married, you probably intermingled your finances with your spouse. This means that you shared bank accounts, cosigned loans and had joint credit cards.
However, you or your spouse may have had debts prior to your marriage or separate debts within your marriage. Therefore, this is what you should know about debt treatment during a divorce.
If you or your spouse accumulated debt before you got married, the person whose name is on the debt is typically responsible for paying it. In addition, some debts that accrued during the marriage are separate. For example, you are responsible for your student loan debt even if you attended college during your marriage. In addition, you are likely responsible for any personal gambling debts.
Marital and joint debt
Texas is a community property state. Therefore, any debt you accrue during your marriage is the responsibility of both partners. This means that you and your spouse are both responsible for paying these debts even if only one of you signed the paperwork. Even medical debt is often split equally among the partners.
Often, the judge will separate the community debts during the divorce proceedings. You may also be able to negotiate their distribution with your partner.
Failure to repay
Even if your divorce decree states that your spouse is responsible for a specific debt, you may have to pay it if your spouse refuses to pay or files for bankruptcy after the divorce.
To gain the best outcome, prepare a statement of all your personal and marital debts. Also, you and your spouse should transfer your joint debt to personal credit accounts and close your joint accounts.