Dividing assets of a marriage is only half of the equation after filing a petition for divorce. After the petition is filed, and answered, divorce proceedings will take place. During these proceedings, discovery takes place. This discovery can be issued in the form of a Motion or it can be required by state law as part of the pleadings to be issued in the divorce petition package that is filed with the court. As part of the discovery process, one of the sections that should be filled out includes the debts of the parties. If you do not include your marital debts to the court for decision as to distribution, or submit an agreement to the court as to the distribution of the debts of each party, this decision can drastically affect your financial future. Especially since most states, such as Texas, being a community property state, consider the debts incurred during marriage to be the responsibility of both spouses, equally.
Credit Card Debt
Often the most troubling debt division to deal with during a divorce is the credit card debt you incurred during your marriage, and possibly including separate debt incurred for the benefit of the upcoming marriage. If you and your spouse jointly owned a credit card, after the divorce is filed, it is essential to protect yourself from further liability by instructing the credit card company to freeze the account until the debt distribution can be resolved. This will prevent any further debt from being incurred on the account. You will then need to work closely with your divorce attorney to divide that debt or to ensure that your spouse is responsible for half of what ever debt was incurred, unless one or both of the parties agree differently.
Installment Loans
Installment loans, particularly those tied to tangible assets such as vehicles or equipment or furniture or a home, tend to be easier to divide. In many cases, the courts will stipulate that the debt will be paid by the spouse who keeps the asset, with any equity in the items divided equally. If that is not possible, the court may consider liquidating the asset in order to settle the debt in question. If the parties cannot agree or do not know how to divide the debts and assets with debt attached, in most cases, a qualified divorce attorney can help you divide the assets fairly and negotiate on behalf of a spouse who is seeking to keep an asset or divide a debt, especially if it is needed to care for the children while the other spouse pays the lien.
Determining Factors
Many factors must be considered when dividing marital debt. In dividing debt and assets of the marriage, earning potential as well as child custody can be considered closely by the courts. Another determining factor in dividing assets and debts, especially in Texas, is if one of the spouses was not faithful, was a gambler or their was marital abuse.
Protecting Yourself
Hiring a divorce attorney who will work closely with you to ensure that your legal rights are protected to the fullest extent of the law is in your best interest. They will assist you in making sure the debt is paid during the divorce proceedings. Do not attempt to sabotage your spouse by not paying the monthly installments as that tactic will only harm you before the court. Lastly, if you plan to ask the court for a marital asset, make sure that you payoff as much debt as possible on that marital assets, before you file for divorce.
If you need a divorce attorney or legal advise as to the distribution of your marital assets and debts, contact one of our representatives at Goldstein & Scopellite, PC by emailing us or by calling us at 214-351-9100. Thank you.
