DIVISION OF DEBT IN TEXAS DIVORCES

One of the most important functions an Austin divorce lawyer serves is to ensure that his client is not saddled with a disproportionate share of the marital debt. Texas is a community property state. This generally means that each spouse has an undivided one-half interest in any property acquired during the marriage and that each spouse is liable for any debt incurred during the marriage.

If both spouses co-sign for a debt, they are jointly and severally liable for the debt. This means that the creditor can collect 100% of the debt from either spouse. In the context of a divorce, one spouse may be ordered to pay a specific debt. This does not mean that the other spouse is no longer liable to the creditor, however. Therefore, it's critical that the spouse who is not ordered to pay the debt be adequately protected in the event the other spouse fails to abide by the court's order.

An Austin divorce attorney will be sure that the divorce decree or settlement agreement contains the appropriate indemnification language to protect his client in instances where the other spouse is ordered to pay a particular joint debt. An indemnification clause states that if, for example, the husband is ordered to pay a particular debt, but fails to do so and the creditor subsequently collects the debt from the wife, the husband will be liable to her from any damage she suffered as a result of his failure to pay. Essentially, the wife would have a claim against the husband for the amount of the debt and any other damages she suffered by virtue of the creditor's collection efforts against her.

There are instances when a debt incurred during the marriage may be treated as one spouse's separate debt. If a court finds that the debt was incurred by one spouse for his or her own personal benefit rather than for the benefit of the family or the household, it may make that debt the sole responsibility of the spouse who created it. Examples of such debts are those incurred for the purchase of vacations, recreational vehicles, or gifts to a lover.

Texas law is clear that a creditor cannot collect the debt of one spouse out of the separate property of the other spouse unless the debt was incurred for the provision of necessaries. Moreover, whether a creditor can get at community property to satisfy a debt depends on whether the property is under the sole control of one spouse or the joint control of both spouses and whether the debt was incurred prior to or during the marriage.

Because the laws governing division of debt in Texas divorces is very complex, hiring an experienced Austin divorce lawyer is advisable. The best Austin divorce attorneys are well-versed in how debts are divided in divorce cases and work diligently to get their clients the best outcome under the circumstances.