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Dividing Debt In a Divorce

By Thomas E. Little

Going through a divorce can be daunting for many reasons. In the early stages of divorce, parties focus much of their time and energy on how to divide the assets. However, one particularly intimidating aspect of a divorce that’s often ignored is how to divide the debt.

Texas Is a Community Property State

This is important to know because this dictates how the court will divide your assets as well as your debts in divorce. A community property state means that all assets and debts that are incurred during the marriage are “community” assets and debts, and subject to equitable division. An equitable division usually means something equal or close to 50/50.

It’s important to note that any debt incurred BEFORE the marriage is still the separate debt of the spouse who incurred it. Therefore, if one spouse has student loan debt incurred before the marriage, it’s still their separate debt. That spouse will be awarded that debt. This also applies to any other debt incurred before marriage (credit card debt, etc.). The trick is being able to prove what was incurred before the marriage.

The most typical debts incurred during divorce are mortgages, auto loans, and credit cards.


Most likely your house still has a mortgage. That’s just part of being an American. If it does, you have two choices. Ownership of the house can be assigned to one spouse during the divorce, and they are almost always responsible for the mortgage owed on the house. Alternatively, you can sell the house and split the proceeds. In that case, the proceeds from the house will be used to pay off the mortgage and the remaining funds will be split.

You need to be aware, however, that just because the judge awards your spouse the house and mortgage that doesn’t mean you’re not contractually responsible to the mortgage company. When a judge awards a house to one party, the house is legally theirs. If you signed your name on the mortgage when you purchased or re-financed the house, you are still responsible for the mortgage.

If your spouse gets the house in the divorce, you need to consider what happens with the mortgage. Ideally, your spouse will be required to refinance the house into his or her own name. But if your spouse is unable to refinance the mortgage, your lawyer can ensure you are protected in the event your spouse fails to make the mortgage payments.


Any vehicles acquired during the divorce will typically be assigned to whoever uses them the most. The most common scenario is a husband and wife with two vehicles. In that case, each would keep their own vehicle and assume any remaining debt on that vehicle after divorce. Any additional vehicles will be treated as any other item of community property and a value will be attached. Whichever spouse gets the additional car, boat, jet ski, etc. in the divorce will also be responsible for paying the remaining debt.

Credit Cards

This is where things can get tricky. As previously stated, any credit card debt acquired during the marriage is the community property of both spouses even if only one spouse incurred the debt.

You’ll want to give careful consideration to how joint credit cards are handled. You don’t want to be left in a situation where your ex-spouse continues using a joint credit card and potentially harming your credit rating. Pay off the joint debt, even if it means liquidating other assets. This will make the divorce a much cleaner break for both parties and you can move on with your life. If you’re not able to pay it off with joint assets, your lawyer can include language in the decree prohibiting your ex-spouse from using the joint card.

Checklist to Follow When Dividing Debt In a Divorce:

  1. Make a list of all debts owed by you and your spouse. Figure out what debt was incurred before the marriage versus during the marriage. Also, figure out who benefited most from that debt.
  2. Order a credit report. Check it to make sure there aren’t other credit cards or other debts that you’re not aware of.
  3. Joint credit cards – Protect your joint credit cards from frivolous use.
  4. Pay off joint debt – If possible, pay off any joint credit cards.
  5. Figure out who benefits from the remaining debt. Whoever benefits from the debt should be responsible for the debt, particularly debt incurred after the date you separated from your spouse.
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