When you file for divorce in Texas, you either will enter into a property agreement with your spouse that divides all marital assets and liabilities, or the court will divide your marital assets and liabilities for you. Liabilities include:
- Home equity loans
- Car loans
- Property tax loans
- Signature loans
- Payday loans
- Title loans
- Credit cards
- Lines of credit
- Misc. debts
If the court divides the marital estate, the division may not be a 50-50 split. Courts can consider factors like income disparities, education and training, age, and fault in the divorce when dividing assets and liabilities. Working with an experienced Houston divorce attorney increases the likelihood you will walk away from the divorce with a property division you can live with.
Do Not Forget the Liabilities
From the very beginning, you need to make sure your divorce attorney has a complete list of all debts incurred during the marriage. If you and your spouse have a house, for instance, make sure you provide information about any mortgages or other liens attached to the property. When you and your spouse figure out what to do with the house, you want to be sure the liabilities attached to it are dealt with as well. Similarly, if you or your spouse has pledged any community property as collateral for a loan, such as household goods or vehicles, you want to be sure the loan is treated in the property division as well as the collateral.
A Divorce Decree Does Not Stop Creditors
Even if your divorce decree awards a community debt to your spouse, if he or she fails to pay it, the creditor may still be able to sue you for the unpaid debt. The divorce decree is binding on you and your former spouse, but not on creditors. In the event this happens, you may be able to sue your former spouse for failing to comply with the divorce decree and seek a monetary judgment against him or her. If you want to start over with a clean slate after divorce, you might be able to wipe out your liability for dischargeable community debts through Chapter 7 bankruptcy, if you meet certain filing qualifications. Also, if your former spouse refinances a mortgage or other debt in his or her name only, you will no longer have any liability for the debt.