How Are Debts And Assets Typically Divided In A Divorce?
Given that Texas is a community property state, debt and property are typically divided fifty-fifty. When you go into a divorce there is a general expectation that the community property will be split right down the middle. Now in practice it does not necessarily come out fifty-fifty at the end, but there is that general expectation that can be expected.
What Does Community Property Actually Mean In Texas?
Generally all the wealth and property as well as debt that is accumulated from the date that you were married to the date that you either are divorced or at the earliest, the date that you are separated. The argument can be made that the date that you separated should be the date that you split property, or separate debt begins to accumulate, but practically speaking it runs till the date of divorce.
Would A Debt That Is Solely In My Name Be Divided With My Spouse Under Community Property?
Yes, generally if you take out a loan or you take out a line of credit during the marriage, then yes, it is generally considered, in practice it is accepted that all of that is community property. However it is depending on how the parties operate and how the facts are for each case. All these questions, this is a general answer, but in family law everything is fact-specific. Everything is case-by-case, but if the parties practice maintaining separate accounts, separate lines of credit and separate credit cards, then there is an argument to be made that when you divide the property that those accounts or debts or even assets should be considered separate, or that the spouse should accept one hundred percent of that debt.
Generally speaking, in my experience when you have a situation like that, many times the spouse will accept that debt solely because for whatever reason the debt was accumulated for a specific purpose that did not benefit the other spouse. In practice what you look for is did the debt benefit the community estate? Or did the debt benefit the other spouse? If it did not, then there are arguments that it should be considered separate debt.
What Is The Significance Of The Date Of Filing For Divorce In Regards To Asset Division?
It is important because if you do not clearly establish the date of separation, or as you referenced the date of filing, then again, you know, both spouses are theoretically on the hook for everything that accumulates, and most importantly debt, until that date is firmly entrenched. If a couple separates and they do not file for divorce and they wait a year to file to finally consummate it, then the community is still theoretically responsible for everything that accumulates even during the time that they were separated. So if one spouse goes into a tremendous amount of debt either trying to recover or maintain the estate past the separation, then the community is theoretically still on the hook for all that, even though one spouse may not have benefited at all from the money that was expended.
Can Someone Simply Walk Away From A Mortgage Or A Property In A Divorce?
No, you cannot just walk away from a mortgage or property in a divorce. When you lose a home whether voluntarily or you get kicked out, I mean it does not really matter. You do not relinquish your interest in the property. Conversely, you do not necessarily relinquish your operation to make that payment as well. Typically when that happens you will see a spouse file for divorce and try to get temporary orders. Most times the ruling of the court will fall on the earnings of the parties and who traditionally covered that obligation, but depending on again the earning power of the parties or disparity of income, that will be determined, or the obligation to pay the mortgage will be determined typically on those facts.
What Happens If Someone Has Separate Property And Then Then Jointly Owns It With A Spouse?
That is considered a community property at that point. If you have separate property and make a specific calculated effort to have it designated as community property, which you did by transferring ownership interest to the other spouse, then now it is considered community. Now does that mean that that spouse can claim a fifty percent interest? That is something that is debatable and something that can be potentially litigated, but yes, by making such a specific action, you have lost the ability to claim that it is separate property and cannot be disposed of during the divorce.
If One Spouse Gets A Home In A Divorce, Will The Other Spouse Still Be Jointly Responsible For The Mortgage?
That is where you have to be very careful. You want to make sure that you have competent counsel to handle these types of division issues. You need to make sure that the necessary language is included in your divorce decree to make sure that issues such as finance are addressed, or issues such as the sale of the home are addressed. Issues such as assumption of the outstanding debt are addressed. Because if they are not, then there is nothing preventing the lending institution or the holder of the note from coming after the other spouse if the spouse that was awarded the home defaults.
The attorneys at Cruz Law obviously have a tremendous amount of experience and years of experience addressing this issue. So you need to make sure that the issues regarding liability for future debt associated with the home are addressed in your property division are in your final decree.
For more information on Division Of Debts & Assets In A Divorce, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (210) 524-7798 today.
Get your questions answered - Call for a free consultation (210) 524-7798.