Managing Debt During a Texas Divorce
Debt is stressful enough on its own, and leaves you beholden to people outside of your control who probably don’t care about you. Factor in a divorce, and you have an explosive situation. Debt is frustrating, and can snowball quickly out of control—a lot like divorce. So what happens to your debt during a divorce? Here’s what you need to know.
Who Pays the Debt?
The court will first look at when the debt accrued and who was responsible for the debt. Factors such as who managed the asset will be relevant, particularly if one spouse claims the other drove the couple into debt.
In most cases, debt accrued during the marriage will be treated as community property. So if you have a special circumstance—such as a spouse who drove the family into debt—you should talk to your lawyer about this. Community property is subject to an equitable division, which means that you’ll both probably end up liable for some portion of the debt.
Equitable, Not Equal
Note that equitable division does not mean equal. The court probably won’t split the debt down the middle. Instead, it will look at factors such as:
- How much money each spouse makes, and their ability to pay the debt
- The earning capacity of each spouse
- Each spouse’s role in accumulating the debt
- Assets each spouse receives in the divorce
If possible, consider settling to achieve a fair division. Often you can get something extra by taking on more debt. For example, if you’re willing to take on the lion’s share of the family debt, you might be able to convince your spouse to let you keep the house or car. If you don’t care about these assets, it might be wise to get your spouse to take on more of the debt.
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