

How are Credit Cards Handled in a Texas Divorce?

A major concern for many of our potential clients during their divorce is dividing up the debt. Unfortunately for many married couples this is because they are under water and have more debt than they do assets. Often much of this marital debt is in the form of credit cards.

When meeting with these potential clients their solution is that they and their ex should slip all the credit card debt 50/50. In this blog article, we will discuss how credit card debt is handled in a Texas divorce.

Is it as simple as splitting credit card debt 50/50 in a Texas Divorce?

I believe many potential clients thinking is that because there is community property, there must be community debts as well. Marriage does not, by itself, create joint liability for the debts.

Characterization of property as separate or community plays a lot into the question of dividing up property during a divorce. However, characterization of debt does not always determine the question of liability.

The designation of a debt as community property has no effect on which spouse may be liable for the repayment of the debt.

Joint liability for debt may exist if one spouse incurs a debt:

  1. as the agent for the other spouse, or
  2. if the debt is for basic living necessities

First Step to Determining Liability of Debt

One of the first steps to determine which spouse’s properties may be liable is to classify the marital property.

Each spouse may have:

  1. separate and community property
  2. sole management and Joint management of property

Under Section 3.202 of the Family Code:

  1. A spouse’s separate property is not subject to liabilities on the other spouse unless both spouses are liable by other rules of law.
  2. Unless both spouses are personally liable as provided by this subchapter, the community property subject to a spouse’s sole management, control, and disposition is not subject to: (1) any liabilities that the other spouse incurred before marriage; or (2) any nontortious liabilities that the other spouse incurs during marriage.

Separate Property

Separate property is not generally subject to the other spouse’s debt liability.

Sole Management of Property

If a spouse has sole management and control over their community property they would have owned except for being married, such as personal earnings.

This sole management community property may only be used to satisfy the debts of the spouse that manages the property or the joint debts.

Jointly Managed Property

Jointly managed property, such as jointly titled asset, may be used to satisfy either spouses’ community or separate liabilities.

Debt Before Marriage

Debt During Marriage

Separate Property of One Spouse




Second Step – Intent of the Parties

Borrowed funds requires an examination into the intent of the spouses in incurring the debt. If the money is borrowed to benefit a spouse’s separate property, and the intent is to repay the funds using separate property, then the borrowed funds will likely be treated as a separate obligation.

Credits cards usually involve an agreement and treated as a contractual obligation. This means it is normally easy to see who is contractually liable for the debt.

Debt Usually follows the Asset or who is Contractually Liable

The general rule in Texas is that debt that is secured by an asset goes to the person who gets the asset after the divorce. If you meet with me, you might hear me say “the person who gets the toy gets the debt.”

If a debt is allocated in a divorce to a spouse who is not legally liable, then the spouse has little motivation to pay and there are few legal remedies available in the court system to force payment.

In addition, the credit of the spouse incurring the debt can be damaged by relying on a spouse to make payment. This is one reason a Judge will often award the credit card debt to the person who is contractually liable for the debt.

If possible the judge may try and offset this debt by allocating more of the stuff if there is some disparity between the spouse in regards to award of debts. However, this is not always possible.

How to handle credit card debt during a Texas divorce can be a stressful process. In order to complications, and allow for a just and right division of marital debt, it is important to work with Texas divorce attorney who is experienced with how to hande debt in a divorce.

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