Division of Marital Debt

Which Debts Are Considered Marital Debts?

Firstly, it is crucial to determine which debts are considered marital debts. Marital debts are debts incurred during the marriage for the benefit of the community estate. These can include mortgages, car loans, credit card debts, medical bills, and personal loans. Debts incurred before marriage are generally considered separate debts and are not subject to division in a divorce.

Secondly, it is important to understand that the division of debts is not always equal. Texas courts will equitably divide marital debts along with other marital property, and the division may not necessarily be 50/50. The court will consider various factors, such as each spouse’s earning capacity, education, health, and the nature of the debt and which spouse incurred it. For example, if one spouse has a higher earning capacity and incurred most of the debt during the marriage, the court may allocate a more significant share of the debt to that spouse. On the other hand, if one spouse has a lower earning capacity and incurred little to no debt during the marriage, the court may allocate a smaller share of the debt to that spouse.

It is also important to note that the division of debts in a divorce may not necessarily discharge the obligation to the creditor. For example, if a credit card debt is allocated to one spouse in the divorce, but both spouses are listed as co-signers on the account, the creditor may still hold both spouses responsible for the debt. Therefore, it is important to work with a qualified Texas divorce attorney to ensure that all debts are properly allocated in the divorce agreement and to take steps to protect your credit score.

In some cases, it may be possible to negotiate a debt settlement or repayment plan with creditors before or during the divorce process. This may help minimize the impact of debts on both spouses’ credit scores and financial standing. Working with an experienced attorney who can help you negotiate with creditors and protect your rights throughout the divorce process is essential.

What Is Considered Separate Debt?

In Texas, separate debt is any debt incurred by one spouse before the marriage or after separation. Debts taken out by a person before they got married, such as student loans or credit card debts, are considered separate debts, and they are generally not subject to division in a divorce.

It is important to note that separate assets and debts can become community property if they are commingled with community property, such as using separate funds to pay for community expenses. For example, suppose one spouse had purchased a home before getting married, but marital funds were used to pay off some of the mortgage while the couple was married. While the mortgage was originally a separate debt, some of the equity owned in the home by paying off the debt may be considered community property and may need to be considered during the property division process.

Contact a Dallas Division of Marital Debts Attorney

At Clark Law Group, our experienced attorneys are experienced in the various aspects of divorce law, including the complex process of dividing marital debt. For more information, contact us at 469-906-2266 for a private consultation.