When a couple legally separates, there are many steps they will have to take before moving forward individually. One of the most difficult parts of a divorce is often dividing up the marital debt. Divorcing couples, particularly those who were married for a long time, often find that they have accumulated a lot of debt over the years, including debt from student loans, business loans, and credit cards.
In Texas, as well as in eight other ‘community law’ states, debt is split 50-50 between the divorcing spouses. However, it is not always that simple. A judge can use his or her discretion to decide which spouse should be held responsible for which debts. Generally, family expenses charged to one spouse’s credit card may be considered marital debt and split evenly between the two spouses. In cases where one spouse earns significantly more money than the other, the judge may decide that the higher-earning spouse should pay for joint debts accumulated during the marriage.
Once the judge has made his or her determination with regards to the couple’s debt, it will become part of the couple’s divorce decree. Both parties will then have to abide by the terms of the decree.
When it comes to joint credit card debt, it is important that you protect your credit score, particularly if your spouse has a tendency to miss payments. By removing yourself from the account, your name will no longer be associated with the account and your credit score will be solely based on your own financial activity. If joint debt was assigned to your spouse in the divorce, your spouse should refinance the loan their own name. However, keep in mind that even if debt is assigned to your spouse, a credit card issuer may still hold you responsible. It is best to close joint accounts as soon as possible and until then, avoid using joint credit cards so you do not add to the debt. If your spouse uses the joint card, keep track of their spending.
Dividing up the debt in a divorce can get messy so it can be beneficial to discuss your financial issues with a divorce attorney as soon as possible. By acting quickly, you can protect yourself and ensure your financial security for years to come.
