What Happens to Debts in a Divorce?

Debts Do Not Disappear

Going through a divorce is never easy, and the financial aspects can often be overwhelming. In addition to dividing assets, it is crucial to understand what happens to debts during a divorce. This blog aims to provide you with tangible and useful tips to navigate common debt-related issues that arise during divorce proceedings.

Community Property State

Texas follows community property laws, meaning that any property or debt acquired during the marriage is generally considered community property, jointly owned by both spouses. This includes debts such as credit card balances, mortgages, auto loans, and personal loans taken during the marriage.

Equitable Distribution of Debt

While community property principles apply, Texas courts aim for a fair and equitable distribution of debts between the spouses during divorce proceedings. The division is not necessarily a 50/50 split but is determined based on various factors like each spouse's earning capacity, financial needs, and contributions during the marriage.

Separate Debt

Not all debts are considered community property. Debts that either spouse had before the marriage typically remain their individual responsibility after divorce. Additionally, gifts or inheritances designated for one spouse during the marriage are usually considered separate debt.

Marital Settlement Agreement

To avoid leaving the division of debts to the court's discretion, spouses can negotiate a Marital Settlement Agreement (MSA). In this document, they can agree on how to divide both assets and debts amicably. The court usually approves the MSA if it meets legal requirements and deems it fair to both parties.

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With Denton Divorce Attorneys

Navigating the complexities of debt division during a divorce can be challenging, but with the right guidance, you can protect your financial future. At Burrows Law Group, we provide comprehensive support and expertise to help you make informed decisions.