When thinking about how to split assets in your divorce, you must also consider dealing with your debts — something many divorcing couples fail to consider until they get deeper into the process.
The more you understand about how property division works in a divorce, the more prepared you’ll be to negotiate or make good decisions. Here’s what you should know.
Texas is a community property state, so couples share their assets and debts
As Texas is a community property state, you will need to divide most debts you acquired while married. As with dividing your assets, there may be exceptions that qualify as separate — an asset or debt belonging to just one person. Here are some things to consider:
- Check any prenuptial or postnuptial agreements you made: Perhaps you agreed the business your spouse brought into the marriage is separate property. That should also mean the pre-existing loans they had for it are also theirs.
- Think about the reasons you filed for divorce: If you filed because your spouse had a gambling problem, you might seek to avoid responsibility for their gambling debts (and this can also play into things like loans you did not agree to take or hidden credit cards and a shopping addiction).
- Check recent extreme spending: If your spouse went on a spending spree to avenge you for filing for divorce, you might try to have those debts excluded from any split.
It is best to close joint credit cards and bank accounts and move to individual accounts once you know you are divorcing. It keeps each person responsible for their spending from that point forward.
Remember, a mortgage is also a debt you need to sort out in divorce
One of the big questions in any divorce is what happens to the family home. Some couples choose to keep the house between them. However, if your ex pays their mortgage share late, it could affect your credit rating as well as theirs.
Ensure you seek legal advice to understand how the rules will apply to any debts or your spouse have. You need to begin your life beyond marriage on as sound a financial footing as possible.