Divorce is hard enough when you’re fighting over assets, but increasingly, I’m seeing the most vicious fights erupt over losses. Maybe that’s because personal debt has skyrocketed in Texas-nearly seven percent from 2015-16 (and almost six percent the year before that). Folks in this region owe a staggering $842.5 billion in personal debt.
Unlike personal property, debt doesn’t have to be split in Texas. Generally, the law requires the judge to assign the debt to the person who’s most responsible for it. But that’s where things can get messy.
A judge may have to determine whether you’re directly or indirectly responsible for any marital debts. “Directly” is a bit more, well, direct: If you signed a loan agreement, it’s your debt.
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However, an ex can dump some of debt onto you, by proving that you were indirectly responsible for it. That, in turn, is another two-pronged test. If an ex can prove that she was acting on your behalf at the time she signed the loan agreement, you may well be on the hook. (For example, you needed to remodel the kitchen, but your credit rating wouldn’t support a loan, so she signed on instead, and you both benefited from the remodel.)
You can also be stuck with marital debt if your ex can prove the debt was for “necessaries.” Like so much of Texas law, the language of “necessaries” is both concrete and broad.
As a general rule, you may expect to be stuck with a bill if the debt your ex incurred was for food, clothing, housing or medical expenses. That’s especially true when kids are the recipients of the necessary.
In fact, according to an analysis done at Baylor, attorney fees may be considered a necessary that the other spouse must pay-even if the fees relate to the divorce!
So forget the gold mine. The issue in some divorce proceedings is going to be, “Who gets the shaft?”
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