How to Divide Debt in a Texas Divorce

Wouldn’t it be great if there was no debt to be settled during a divorce? If the credit card or loan is filed jointly, then each party is equally on the hook for that outstanding debt. Creditors do not care about divorce decrees, so it is best to plan ahead for worst-case scenarios when and if an ex-spouse doesn’t pay. Here are some things to know about debt and how to protect oneself during and after a high asset divorce.

If possible the divorcing couple may want to liquidate any marital assets to pay off outstanding debts. In scenarios where a spouse agrees to take on a portion of the debt, that debt should be moved to an individual account using a balance transfer; this will help protect the other spouse’s credit score.

Worst-case scenarios can happen with debt and divorce. It is important to remember that creditors do not care about a couple’s divorce settlement divides the debt. For example, if during divorce proceedings one spouse was allocated the debt for an automobile but chooses not to pay this debt, creditors can still go after the other spouse to collect. Being amicable with an ex-spouse can help to keep communication open in case a situation like this arises.

Finances can be especially messy during a divorce. There are so many things to be divided that it can be difficult to determine even a general net worth of marital property. Taking each item and amount of debt one by one will give some clarity to the confusion. The divorcing couple should try to be amicable and work together to divide their assets and debts, but each spouse should take steps to protect themselves just in case.

Source:, “Debt and Divorce: 5 Steps to Make a Clean Credit Split,” Dawn Papandrea, July 14, 2014

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