Marriage is a union between two people who want to share their life together “for richer, for poorer.” It is common knowledge that they are to share their assets, and that is usually a pleasant discussion. However, when liabilities are the topic, specifically debt, how much accountability does a spouse have?
The laws in Texas have specific guidelines with regards to the extent of responsibility you have for your spouse’s debt. Here are some factors that need to be considered:
Community Property Laws
One key factor to consider is that the state of Texas recognizes Community Property Laws. Thus, every property that the couple acquires or purchases is deemed community property. The exceptions are the property acquired prior to the marriage or property inherited or received as a gift to him/her alone.
How does this apply to liabilities? Under typical circumstances, both spouses are equally liable for the debts incurred, regardless of whose account it was charged to. However, there are different situations which often result in different extents of liability.
It is a misconception that Community property also translates into community debt. While it is true that spouses are responsible for each other, that concept is limited to “necessities.” That extends to the purpose of the debt incurred.
If the debt was used to acquire necessary items like food, shelter or clothing, it is considered community debt. A credit card charge for a luxury bag, for example, may be disputed as an exception to community debt. It may not seem equitable for the spouse to be liable for that after divorce. However, there are also exceptions to this.
Debts Incurred as a Couple
There are instances when debt is incurred as a couple, and this agreement is recognized by the divorce court. Thus, if both spouses agree to pay for a loan or even a credit card arrangement, both of them would be liable regardless of the purpose of the debt. However, the judge can appoint one spouse to be responsible for subsequent payments, or to shoulder the greater burden of the payments.
The liability for the surviving spouse is heavily determined by their community debt. Personal debts, or those incurred prior to the marriage, should be settled by the deceased’s estate. Thus, it is also important to determine which part of his estate can be utilized to pay for his debts.
Typically, the conjugal property, including the home, is safe from his creditors and cannot be included as payment for the personal debts of the deceased spouse.