Financial concerns often rank among the main reasons why married couples in Dallas choose to divorce. Disagreements over money can stem from spending habits to control of a couple’s bank accounts and encompass all matter of financial issued in between. During the marriage (even a short marriage), it is not uncommon for a couple to accrue debt. If and when they choose to divorce, one of the more common questions is who assumes what debts.
Defining marital property
Property division proceedings categorize a couple’s property into two classes: separate and marital. Separate property is that which a person brings into a marriage; she or he retains complete ownership of that after the marriage ends. A couple accrues marital property during their time together. Most assume that to be money and possessions, but a couple’s liabilities also rank among their shared property.
Equitable distribution requires the fair division of marital property. That includes a fair division of a couple’s debt. According to Section 3.201 of the Texas Family Code, a person becomes liable for her or his spouse’s debts if that person acts as an agent for the spouse, or the spouse incurs a debt to purchase assets and items necessary for a couple’s well-being. Those include anything necessary to support each other.
Fairly dividing up debt
The aforementioned regulation helps one to understand why the court would expect both parties to a marriage (and subsequent divorce) to jointly assume responsibility for debts such as a mortgage or car payment. Yet, what about personal loans or consumer debt? In those cases, the court will often look to determine who was the primary beneficiary of the debt.
For instance, if one spouse opens up a credit card and charges it up with purchases he or she primarily benefited from (such as clothes, jewelry or other personal items), then the court may decide that that person alone should assume that debt. It may become a joint liability, however, if the account opened in the other spouse’s name or had the other spouse as a co-applicant or cosigner.