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Debt belongs to both spouses under Texas community property law

It is not uncommon for financial disputes to be blamed for the breakdown of many Texas marriages. Such conflicts often occur because couples failed to discuss their personal financial positions prior to the marriage. Not many individuals appreciate learning about a spouse's unpaid debts only when collection agencies start making harassing calls. Because Texas is a community property state, both spouses will be responsible for any debt agreements entered into during the marriage.

Texas couples may want to be aware that this could have serious ramifications if not kept in mind whenever they obtain new debt. Not only is personal debt the responsibility of both spouses, one spouse could be held responsible for business debts of the other spouse in the event of business failure. Disgruntled creditors may even request a garnishing order against a working spouse's wages in an attempt to recover money owed to them.

Once a couple is divorced, only the spouse who signed a debt agreement will be held responsible; however, in certain instances, a divorced spouse may be liable for an ex-spouse's debt. If the couple kept a joint bank account, or if they obtained debt to cover joint expenses, such as renovations or repairs to the family home, a divorced spouse may carry joint responsibility. Couples who are proactive may circumvent such situations by drawing up a legal document stating who would be responsible for specific debts. It is important to understand that such an agreement will not override a creditor's debt agreement carrying the signatures of both spouses.

Couples who are engaged to be married may benefit from obtaining financial and legal advice to protect their assets and record mutual agreements related to marital debt under Texas community property laws. Similarly, couples who are facing divorce may need similar services to ensure the protection of their assets. Couples who have addressed these matters prior to marriage may find that a divorce without months of litigation is possible.

Source: hamlethub.com, "Are You Responsible for Your Partner's Debts?", , July 1, 2014

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