Debt Division in Divorce

In many divorces, the parties will argue regarding who has the right to certain assets and how any marital property should be divided. In their quests to garner a fair and equitable division of property, though, some people overlook another issue that carries the same significance, which is how their liabilities or debts should be disbursed. The manner in which debts are apportioned can have a lasting impact on a person’s financial health and future, and it is critical for anyone who may get divorced to speak to an attorney as soon as possible. The seasoned Dallas divorce attorneys of McClure Law Group are skilled at handling the complexities of debt division in divorce, and if you hire us, we will advocate aggressively on your behalf to help you seek your desired outcome.

In Texas, debts may be the responsibility of one spouse individually or both spouses jointly. Separate debts include those that a spouse incurred before entering into the marriage and debts incurred during the marriage by one spouse. Examples of separate debts include student loans and financing for automobiles. Joint debts are those debts that the parties take on together, like mortgages and credit card debt.

The Texas Family Code (the Code) sets forth rules for how debts should be handled in divorces. The Code provides that one spouse’s separate property is not subject to the other spouse’s debts unless a rule of law applies to make both parties liable. Additionally, all community property may be subject to debts that arise out of the tortious liability of either party during the marriage. This means that if a party is ordered to pay a judgment for negligence or any other harmful behavior in a civil lawsuit, that judgment becomes the debt of the marital estate.

Community property that is solely managed and controlled by one spouse is not subject to any debts the other spouse incurred prior to the marriage or any debts acquired during the marriage that are non-tortious. Community property that is jointly managed or managed by one spouse is subject to liabilities that he or she incurred during or before the marriage, however.

Generally, in determining how to handle debt in a divorce action, the court will assess when the debt was incurred, who the debt belongs to, and the nature of the debt. If a court finds that a couple has joint debt, there are numerous ways it may choose to divide it. Under Texas law, courts do not have to divide marital debt equally; they must merely distribute it in a manner they deem fair in consideration of the unique facts of the case. For example, the court may divide the debt equally among the parties. In some instances, the parties will agree to sell marital property, such as their house, to pay any outstanding joint debts before the divorce is finalized. In other cases, the court may grant a party that agrees to pay the bulk of joint liabilities a greater share of marital assets. If one party has traditionally cared for the children, the court may order the other party to bear a greater portion of any joint debt.

Many couples incur substantial debts throughout the duration of their marriages, and if they divorce, they will often argue over who should bear the responsibility of their financial liabilities. If you are considering ending your marriage or were served with legal documents instituting a suit for dissolution, it is smart to meet with an attorney to discuss what you can anticipate with regard to debt division in your divorce. The trusted Dallas lawyers of McClure Law Group can assess the facts of your case and inform you of what measures you can take to try to protect your interests. We regularly represent people in divorce actions in Dallas, Frisco, Fort Worth, Irving, McKinney, Richardson, Rockwall, and Garland. We also help parties with other family law issues in cities in Dallas, Rockwall, Collin, Denton, Tarrant, and Grayson Counties. You can reach us through our form online or by calling 214.692.8200 to set up a conference.