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.
When many people decide to get married they don't want to ruin the romance of the occasion by talking about money. Others think money issues only happen to "other people," but they are wrong. Money problems in a marriage are essentially communication problems with dollar signs. No matter how much in love a couple might be, no one is immune to the effect that money and debt can have on marriage. That lack of communication regarding money and debt can both lead to divorce and bleed into matters of property division and financial support should a union end in a split. According to a 2009 study conducted by researchers at Utah State University, those who have financial disagreements at least weekly are more likely to divorce. With more people marrying later in life, there is a greater chance each individual will carry their own debt into a marriage. The best way for both parties to figure out how to deal with the joining of their finances is to take the time to talk about the issue seriously before they say "I do." However, a study conducted in 2010 by American Express revealed that such a pre-marital talk about finances was the exception, rather than the rule.
A recent Fox Business report outlines several important lessons about divorce and protecting one's finances and credit score. This is the first of two posts on the topic, which will hopefully help you protect your best interests in the case of divorce:
This year's St. Valentine's Day has already come and gone. Maybe you found a love interest this holiday or confirmed that your current valentine is a keeper. In that case, it's important that we continue our discussion from the last post about how to plan for and protect your finances in relation to marriage and divorce.
The vows recited in a marriage ceremony cover more ground than we all initially give them credit for. Sure, we get that we are promising to love, honor and cherish our spouse. But along with the romantic ideas of love come some pretty important, less-romantic realities.