When two people get a divorce, they are often concerned with the division of assets. However, not many consider the financial implications that their collective debt will have on their divorce. The division of debt is just as important to discuss with your spouse and/or your attorney as the division of assets, as you might find that you share some or all liability for marital debts. At the Law Offices of Udeshi Clark and Associates, our Dallas, TX divorce attorneys are experienced in helping clients manage their marital debts and in ensuring that they are not unfairly burdened with marital financial liabilities.
Determining Marital Debt From Separate Debt
Just as marital assets are defined as those acquired during a marriage, marital debts are debts and liabilities acquired by the couple during the length of their union. All debts acquired by each spouse prior to tying the knot are considered separate property and are not subject to division. Each spouse is responsible for whatever debts he or she brings into the marriage.
Many individuals assume that the spouse whose name is on the debt is solely responsible for paying off that debt. For instance, if the wife has a credit card in her own name, with a balance of $1,200, the husband might assume that he is not responsible for that debt. If a husband has a remaining car payment of $15,000 in his name, the wife might assume that he is stuck with the full remaining balance. Both of these spouses would be wrong and unpleasantly surprised when it came time to distribute assets and debt.
How Marital Debt is Distributed in Dallas, TX
When distributing debt, the judge will not just look at when the debt was accumulated; he or she will also consider what the acquired assets were used for. If the wife’s $1,200 debt was used for groceries, bills, or even clothes for work, it could be considered marital debt. However, if her debt did not in any way contribute to the family’s wellbeing, such as a gambling debt, the judge may deem it a separate liability.
If you feel that you are unfairly saddled with your former spouse’s debt, our Dallas allocation of debt attorneys can help you to reclassify liabilities as “marital” and “non-marital” debt. It may take some litigation, but by proving that your former spouse’s debt was not used for marital or family needs, we can help ensure that you are not stuck paying off a debt that is not yours.
On the other hand, if you feel that you were unfairly saddled with the majority or all of a marital debt, our family law attorneys can show how your debt was used to support the family and why your former spouse should be liable for paying off at least half of it.
Once it is determined who is liable for a debt, arrangements will be made for the payment of each debt. However, each party is warned that just because a spouse is deemed full or partially liable for a debt does not mean that he or she has to pay it off. The spouse can choose to not pay off the debt; if that debt is in your name, you would be the one to default, and not them. Because of this, it is highly recommended for each party to retain liability for debts in his or her own name. By taking responsibility for debts in your name, you can protect your credit from being affected if your ex spouse misses a payment for any reason.
Consult a Dallas Allocation of Debt Attorney
If you are going through a divorce, or if you are contemplating filing for a divorce, and if you have marital debt, reach out to the Dallas allocation of debt attorneys at the Law Offices of Udeshi Clark and Associates. We will review your debts and discuss how you want each to be distributed, as well as what you can reasonably expect. To speak with one of our divorce attorneys today, call (469) 914-5564 or contact us online.