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Community property states and debt

Texas residents who are thinking about getting a divorce should be sure that they understand laws related to asset division before proceeding. This is because Texas is a community property state. The family law relating to divorce in a community property state declares that all property and debts accrued over the course of the marriage are to be split up when the marriage ends. This is important because it means that someone with no debt in their name could end up being responsible for half of their spouse's debt.

In states that do not have community property laws, individuals usually only end up responsible for their partner's debt if both of their names are on a loan or a credit card account. However, community property states split debt down the middle, no matter whose name it is under. Due to the way laws are set up, individual debts can end up on a spouse's credit report and even damage their credit rating in some cases. Additionally, if a loan is not paid off, lenders are able to pursue debt collection activities against a spouse.

For this reason, people who are filing for divorce should see about freezing all credit card accounts in either their or their partner's name, which will prevent new charges from being added to the card. This may require legal action if someone's name is not on the account, but it is important to prevent new debt from accruing.

Divorce and asset division can have a lasting impact on people's finances, so it is important they understand what is involved in this process. A lawyer could let someone know what to expect and negotiate on their behalf.

Source: Fox Business, "Divorce and Card Debt in Community Property States", Sally Herigstad, July 17, 2013

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Bruce Turner

In addition to his law degree, Bruce Turner has a master's degree in tax law and is Board Certified in Commercial Real Estate Law by the Texas Board of Legal Specialization.

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Bruce Turner with Bennett, Weston LaJone & Turner, P.C.

Attorney Bruce Turner is located in Dallas and represents people and businesses throughout DFW and the Metroplex, including Denton, Carrollton, Lewisville, Flower Mound, Farmers Branch, Irving, Las Colinas, Corinth, Highland Village, The Colony, Plano, Frisco, Allen, McKinney, Mesquite, Grand Prairie, Garland and Grapevine as well as Collin County, Denton County and Dallas County in Texas.

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