Debt and Divorce: Facts to Know Before, During and After Divorce

As common sense and statistics tell us, the leading cause of marital discord is money.  Therefore, it is not surprising that many times divorce inventories have more red numbers than black ones. 

Media sources often portray Hollywood stars of “power couples” divorcing.  Included with the typical hype may be which party will get the mansion, vacation home, or car collection, but rarely is there any coverage about how the parties will divide debt. 

The hard truth is that debt, just like assets, are included in the community estate.  No matter what your own moral compass may register regarding your and your spouse’s debt, Texas case law establishes rules that might surprise you.  First, debt incurred during the marriage is presumed to be community debt.  See Cockerham v. Cockerham, 527 S.W.2d 162, 171 (Tex. 1975).  이혼재산분할 There must be a sufficient amount of evidence to rebut this presumption. 

Despite well established case law, Texas divorce decrees contain sections entitled “Debt to Husband” and “Debt to Wife”, which seemingly assign responsibility for each debt.  These sections of the decree will identify each creditor, the account number, and account balance.  At the close of the divorce proceedings, the divorced couple has a lengthy document called a final decree of divorce.  The husband, wife, their attorneys, and the judge sign the final decree.  Often times the parties order a certified copy of their divorce decree, throw it in a drawer or the safe deposit box, and rarely look at it again unless there are children and custody issues involved.

It may be months or years later when the phone rings and one of the parties is greeted by the monotone utterances of a bill collector reading a script off the computer screen.  The dialogue may go something like this:

Bob the Bill Collector:  “This is Bob with XYZ Visa.  I’m calling because your account is 60 days past due, and I need to know when you plan to remit the past due amount and begin making payments.”

You:  “What are you talking about?  That’s my ex’s account.  Our divorce decree says so.  I haven’t been married to him/her in over (whatever time frame)!  Call that deadbeat for the money.”

Bob:  “Well, Mr. or Ms. So and So, that doesn’t mean you don’t owe the debt if your ex defaults.”

You:  “I have a certified court order signed by me, my ex, our attorneys, and the judge saying that I don’t owe you anything for that account.  That account is the ex’s problem.  When you find him/her, let me know because he/she owes me money, too!”

Bob:  “Your divorce decree might say you aren’t responsible, but the law says you are.  Why don’t you give me a check by phone and we can get you on a payment plan.”

You:  “Are you dense?!  Did you hear anything I just said?!  I’m not responsible and I’m not paying you one red cent on any of that debt.  Call the ex but stop hounding me!”

Bob:  “Mr. or Ms. So and So, I did hear you, and you’re wrong.  No matter what your divorce decree says, you owe XYZ Visa.  If you don’t begin making payments, XYZ Visa will report this delinquent account to the credit reporting agencies, and take action up to and including litigation.”

I’ll let you fill in the closing dialogue for yourself.  You are angry and hang up the phone.  You may think that Bob, located at some call center hundreds of miles away, has no idea what he’s talking about. 

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