Lara Bracamonte Davila

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Who is responsible for paying joint debts post-divorce?

On Behalf of | Jul 18, 2023 | Family Law

Paying back debt is a necessary obligation for most couples in Texas. If a couple divorces, it is likely that one or the other will be assigned the responsibility of paying back joint marital debts. It is easy to assume that if you are not assigned a marital debt you are absolved of all responsibilities related to repayment. However, this is not always true.

Property division in Texas

In Texas, with some exceptions, community property includes all assets and debts accumulated during the marriage. The exceptions are for certain types of assets such as inheritances and awards of damages, as well as property and debts designated as separate in a premarital agreement. Both spouses have an equal ownership interest in all marital assets and debts. This is because Texas is a community property state for property division purposes.

Many couples focus on who gets to keep what post-divorce, but it is just as important to understand who is responsible for which debts post-divorce. Marital debts, like marital assets, are divided in a divorce. The results of this division are recorded in the final divorce decree.

Marital debt post-divorce

However, even if a debt is divided and the results of this division are recorded in a divorce decree, this does not always mean one spouse is totally absolved of the debts assigned to the other spouse. Creditors are not bound by a divorce decree. This means that if both spouses took on a debt jointly, they are both responsible for the repayment of the debt, even if they divorce.

So, if a spouse is assigned a joint debt in a divorce, and fails to make timely payments, the other spouse might be held responsible for paying the debt back. One way to avoid this situation is to ensure that the spouse who is not assigned the debt has their name removed from the debt post-divorce.

Alternatively, spouses can pay back joint debts prior to the finalization of their divorce and close the accounts. This way, they will likely not be held responsible for missed payments.