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Debt allocation during divorce

Many of the of the clients that we work with here at The Law Office of Roland R. Esparza, P.C. have debts along to go with the assets that they must determine how to split with their spouses. This may prompt you to ask how debt is divided during divorce proceedings. Just as the court has guidelines that determine what is separate and marital (community) property, so too does it define who assumes what debt between spouses.

According to Texas Family Code, your spouse may be liable for debt if you acted as his or her agent in assuming it. In other words, if he or she gave you the power to incur the debt on his or her behalf, he or she may held responsible for paying it after your divorce. Your being married does not automatically qualify you as his or her agent. Similarly, he or she could be made responsible for any debts that you acquired necessary to his or her support or that of your children.

Any marital property over which you were given control in your divorce settlement is typically protected from debts incurred by your spouse before you were married. However, tortious liability claims against your spouse involving debts acquired during your marriage could require the sale of both separate and marital property to settle them. It’s left to the judge to determine the order of sale. While certain cases may progress differently, the order will usually be as follows:

  •          Your spouse’s own property.
  •          Whatever marital property he or she controls.
  •          Whatever marital property you control.
  •          Whatever property over which you share control.

More information regarding the division of marital assets and debts can be found on our site. 

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