Debt division

Debt is Divided During Divorce

Just as with dividing assets during a divorce, debt acquired during the marriage must also be divided in a just and right manner. Even if one spouse solely incurred the debt, it is still considered community property.

The circumstances surrounding debts will be considered in determining a just and right division. If debt was incurred by one spouse over-spending on unnecessary purchases, only benefitted one spouse, or was incurred to support children of the marriage, the court will take these factors into account.

Texas courts will often consider whose name the debt is in as well. If it is solely in one spouse’s name, then it is likely that spouse will be awarded the debt as third-party creditors are generally not bound by property division in a divorce.

Removing Your Name from Debt

A common question is what happens with the mortgage when one spouse receives the home. As stated above, third-party creditors are generally not bound by property division orders as they are not a party to your divorce case. The court cannot order the mortgage provider to remove a spouse from this liability, and often courts do not include order requiring refinance attempts.

Another concern arises if your ex-spouse was ordered to pay a debt and fails to do so. This can have a negative impact on your credit. Furthermore, the creditor could even come after you for non-payment even though your ex-spouse was awarded the debt in your divorce.

Experienced divorce attorneys will consider debt during your property division and offer creative solutions that a court may not be willing to order. If your desire is to leave divorce debt-free or without concerns of being burdened by your ex-spouse’s debt, our lawyers will work with you to develop a strategy to reach your goals and protect your financial future.