COVID-19 UPDATE: We are open to serve you, with in office visits, remotely via teleconference, & video conference. Call Today!

Category Archives: Property & Debt Division

Property Division Principles in a Texas Divorce

“Will I lose everything?”

One of the top concerns many of our clients have about their divorce is property division. We know that a divorce can seem daunting, especially when there are assets such as a home involved. Fortunately, Texas law protects you and your spouse from walking away without your fair share of the property.

How Is Property Divided in a Texas Divorce?

The state of Texas follows the rules of community property. This means that community or marital property must be divided equitably between each spouse. Marital property is property that was obtained while you and your spouse were married. This includes assets such as your home, vehicles, bank accounts and more.

Property you obtained before your marriage, known as personal or separate property, is typically yours to keep in the event of your divorce. Yet, these lines can become blurry when discussing retirement assets and businesses, among many other assets.

The Process of Division

If your divorce heads to court, the judge will have the responsibility of determining which property is separate or community property. Your attorney will be there with you to advocate on your behalf. The process of division will vary depending on the assets you and your spouse share.

Some assets such as personal debt are easy to divide, as many couples simply take their own debt after the divorce. Other assets such as your home may be more difficult, as they may need to be sold to divide properly.

Another difficult asset is often the family business. If you and your spouse own a business together, you’ll need to have it valued first. You and your attorney can then decide if selling the business is the best next step or if sharing interest with your spouse is enough.

Property Division Isn’t Always 50/50

The term “equitable” means fair. Equitable property division doesn’t always mean a 50/50 split in a divorce. There are certain circumstances where the court will allow one spouse to walk away with more. For example, if a spouse has suffered through family violence or adultery, the court may decide to grant them additional assets.

The court will also consider a wide range of factors when determining the balance of property. Factors such as who will have primary custody of the children and who has a higher level of income may affect property division.

Considering a Divorce? Call the Attorneys at Schneider Law Firm, P.C.

If you’re considering a divorce, you don’t have to figure it all out on your own. We’re here to help. Reach out to the Arlington, Texas, divorce attorneys at Schneider Law Firm, P.C. Give us a call at 817-799-7125 or send us a message.

How Is Debt Divided in a Texas Divorce?

According to a 2018 study, the average American has more than $38,000 worth of debt. With the recent pandemic and economic challenges our country faces, experts estimate that the number has increased significantly in 2020. So, what does that mean for divorcing couples in Texas? How is debt divided, and what should you do if you and your spouse are considering divorce with debt?

How Texas Courts Divide Debt

If you and your spouse agree on how to split your debt, the judge will likely approve your agreement. However, if you can’t agree, the court will decide how to divide the debt. In Texas, courts divide property and debt using the community property method. This means that the property acquired—and the debt that accrued—during your marriage belongs to both you and your spouse.

For debt that’s considered community property, Texas law requires the court to divide the debt fairly and equitably. The only property or debt not eligible for division is separate property—property or debt that you or your spouse had before the marriage or that meets certain criteria.

Your Divorce Decree Doesn’t Affect a Creditor’s Right to Collect

You should know, however, that your Final Decree of Divorce does not affect a creditor’s right to collect a debt from you. Even if the judge orders your spouse to pay a debt that is in both your names, the creditor may still come after you for the debt if your spouse does not pay.

For example, if your car loan is in both of your names and your spouse keeps the family car, they must refinance the car loan to get your name off the debt. If your spouse is unable or unwilling to refinance the loan, and then they stop paying, you will be responsible for the debt—even though you no longer drive the car. Talk with your lawyer about how to prevent this from happening to you.

Types of Debt to Consider

Be sure to consider all of your debt when making financial decisions about your divorce. These decisions can have a serious impact on your future, so it’s important to review all the details carefully.

Most Americans have some combination of these forms of debt:

  • Credit cards
  • Student loans
  • Mortgages
  • Car loans
  • Personal loans

Dividing Debt: Paying Off Debts From Your Marriage

There’s no one-size-fits-all solution for dividing debt in a Texas divorce. Depending on your situation, you and your spouse may choose to sell the family home and vehicles in order to be free of the debts associated with them.

If you don’t, you could be responsible for debt that you cannot pay—especially as the income that supported one household must be stretched to support two. After your divorce, be sure to check your credit report and note any discrepancies. Talk to your attorney about anything that concerns you.

If You’re Worried About Marital Debt, Talk With a Lawyer

If you are considering a divorce and have debt, it’s a good idea to talk with the lawyers at the Schneider Law Firm, P.C., as soon as possible. Talking with us early in the divorce process can help protect your interests and keep your options open.

Call us at 817-799-7125 to get started. Consultations with our attorneys are confidential. We’ll talk with you about your options and help you understand what steps to take to manage debt and divorce.