My Spouse Accumulated a Lot of Debt. Am I Responsible For It if We Get Divorced?

December 14, 2018 Posted in Divorce

Divorce can be overwhelming. As if the emotional stress were not enough, there are significant financial matters that need to be addressed. And one of the most stressful and distressing issues concerns spousal debt.

If one spouse incurred significant debt during the marriage, the other spouse might believe they have to pay it off no matter what. This is not necessarily true in Texas.

Texas Community Property Law and Debt

Texas is a community property law state. What that means is that, with some exceptions, all assets acquired during marriage are part of the community property of the marriage. It is shared property that will have to be divided during a divorce. If a spouse can show that property was owned before the marriage or was inherited and maintained separately, it may be excluded from the shared estate.

Shared Debt in Texas

Similar to the rules surrounding the separation of property that was owned individually prior to marriage, liabilities that a spouse incurred before marriage are not shared by the spouse during a divorce. However, there is a marked difference in how debt acquired during a marriage is treated under Texas law.

Texas law looks at debt as joint debt if it was incurred for the acquisition of necessities or while one spouse was acting as an agent for the other. The idea behind this requirement is that it is assumed that each spouse takes care of the other during marriage. So if something was purchased as a necessity or while one spouse was acting on behalf of the other, it makes sense that the debt is shared.

Of course this could also be a point of contention in a divorce. Whether or not a specific debt was acquired when a spouse was acting as agent for the other is a question of fact for a court to decide. Under Texas law, it will not be assumed that all debt was incurred on behalf of the other spouse solely as a result of the marital relationship.

Some debt, such as that incurred under joint and several liability, will be considered shared debt, since those were the terms for the debt when the credit was extended by the creditor. This is the case even if one spouse ends up burdened by the court with paying off the entire debt.

How Dallas Divorce Lawyers Can Help

Figuring out who owes whose debt in a divorce can be confusing. And it can be even more confusing to try to figure out what is in your best interest when managing debt in a divorce. Depending on the specific circumstances at issue in your divorce, how debt is handled could play an important role in how property is divided and what kind of settlement you end up with. How debt is handled could even play a large role in whether your case ends up in court.

You need a strong advocate during your divorce, especially if the handling of debt becomes a contentious issue. For help with your divorce, call Attorney Michael P. Granata at 214-977-9050 to make an appointment or contact us online for a consultation.