Married couples commonly share debts as well as assets. This logically requires that a divorcing couple determine which person may be responsible for repaying which debt after their divorce process completes.
Assigning liability for joints debts may end up becoming a central part of a couple’s property and asset division agreement. However, spouses should clearly understand how creditors determine liability for a debt and how their divorce decree may or may not protect them from collection efforts.
The importance of the names on the account
As explained by Bankrate, a lender or creditor may attempt to pursue collection efforts against any person named on a debt account regardless of the terms stipulated in a couple’s divorce decree. This means a divorce decree may assign liability for a debt to one spouse, but that the creditor may request repayment from the other spouse should their name remain on the debt.
Options for divorcing spouses with debt
Repaying joint debts as before filing for divorce or during the divorce process allows both spouses to move on after their divorce with no concerns about being hounded by a creditor for a debt that a former partner failed to pay. When a couple lacks the ability to repay all of their shared debts before getting divorced, each person may consider transferring debt to accounts in their names only.
This information is not intended to provide legal advice but is instead meant to give residents in Texas an overview of how their creditors and lenders may view financial responsibility for a joint debt after they have finalized a divorce.