PHAM & CLOVES, PLLC

WHICH GOES WHERE? 

When, during the divorce process, the parties try to divide debt and assets there could be some confusion about just which party is entitled to which debt or asset. Oftentimes, these issues are resolves through negotiations between the Family Law Lawyers through lawyer-level negotiations, or through mediation. In the division of debts and assets, the assets and liabilities must be characterized prior to division to determine with which party the debt or asset will rest. A debt or asset can be characterized as either community or separate. If the debt is one incurred by both parties, then each stands to be liable for the debt. If the debt is separate, then the individual incurring the debt will be liable, except for certain circumstances where one spouse incurred debt for “necessities.” Necessities are things needed every day to survive like food, shelter, medicine, etc. Credit card companies can sue a spouse who did not incur the debt, but who benefited from the purchases by accepting “necessities.”

One way to characterize debt is to determine the time when the debt was incurred. If the debt was incurred prior to the marriage, then the debt is likely to be characterized as separate. Conversely, if the debt was incurred after the marriage, then it will likely be characterized as community. However, if on spouse incurs a debt that is not for necessities and is unknown to the other spouse, that debt will likely be characterized as separate.

Debt incurred by both parties, but awarded to one spouse, is still legally owed by both spouses. That is to say that, simply because your spouse is suppose to pay a certain debt per the divorce decree, the creditor can still attempt to collect the debt from both spouses. Creditors do not consider the property division in a decree when deciding from whom to collect the debt.

If you are considering a divorce, figuring out the character and scope of the marital debt and assets should be done prior to filing suit. Knowing the amount and character of your debt early on can help the process resolve quicker. A Houston Divorce Attorney at Veritas Legal Group, PC will be able to counsel you on just how to handle the division of your assets and liabilities. To contact a West Houston Family Law Attorney at Veritas Legal Group, PC, you may simply fill out the online contact form, or call 713-492-0337 to set a time for a consultation. Being well-informed early on in the divorce process can help you reach resolution quicker and with less expense.