While many divorce attorneys in Texas know the Lone Star State observes community property laws, many lawyers erroneously believe this extends into a similar concept called “community debt.” This is simply not true.
Yes, divorced couples are liable for any property acquired during their marriage, but these laws don’t apply to debt incurred during your union with your spouse, save for a few very specific exceptions.
In this guide, we answer a few questions about community property law, clearing up misconceptions about community debt in the process.
What is Community Property?
Texas, which observes community property laws, treats all assets acquired during the marriage as equal conjugal property. This means that any property acquired by either spouse is shared and subject to property division proceedings during a divorce.
Only under specific conditions can one spouse prove a certain asset is a separate property, which includes property owned by one spouse before the marriage, or property inherited or received as a gift.
What is Community Debt?
Community debt is a false concept that takes the provisions of community property laws, applying them to debt inquired by the couple during the course of their marriage.
Essentially, the community debt concept makes the wrong assumption that any debt incurred by either spouse during their marriage is shared debt. So, if you are debt-free but your spouse incurred credit card debt while you were married, you are supposedly liable for paying off that debt after getting divorced, which again, is not true.
However, there are very specific kinds of debt that a spouse may be liable for.
What Kinds of Debt are Divorced Spouses Liable for?
Texas law requires each spouse to support the other. For example, spouses are liable for providing each other necessaries, be it food, clothing, or shelter.
According to Texas Family Code §3.201, a person can be held liable for the debt of his or her spouse only if that spouse incurred a debt while acting “as an agent for the person” and incurred “a debt for necessaries.” A person, however, is not automatically considered an agent of his or her spouse due to marriage.
What About Debt Incurred Together as a Couple?
Yes, couples can incur joint and several liability for debt acquired together as a couple. During divorce proceedings, the court generally takes a hands-off approach to avoid affecting the rights of the creditor for joint and several liability of debt.
For example, if both spouses are on contract for paying a credit card account, even if the court rules during divorce proceedings that one spouse should shoulder the burden of making all further payments, both parties are actually still jointly and severally liable for said debt.
The complexities of community property laws and property division during a divorce are precisely why it’s imperative that you hire a skilled family lawyer. For further questions on these matters, don’t hesitate to sit down for a discussion with family law attorney Daniella Lyttle. Contact the Lyttle Law Firm to schedule a consultation.