In many marriages, both spouses share ownership rights over the things they purchased while married. For example, when a married couple lives together in a house they purchased, furniture typically isn’t segregated between them—such as my toaster or your king-size mattress. Instead, most couples intuitively consider their home’s furnishings as our furniture.
However, when the couple gets divorced, they must determine how to allocate what they formerly considered to be their stuff. This principle reflects the legal issues that come up when courts divide a couple’s marital property upon divorce.
When a couple gets divorced, courts must allocate assets between the spouses. Under rules of community property, all property the couple acquired while married to each other is considered to be community property subject to a just and right division upon divorce.
As a corollary, all property each spouse acquired before getting married and after they split up qualifies as their separate property and is not subject to division upon divorce. Notably, any property a spouse received during marriage as a gift or through inheritance is also deemed their separate property.
Importantly, courts determine the property rights of divorcees by allocating not only their marital assets but also their marital liabilities. Each spouse is entitled to their separate property plus their just and right share of community property. Similarly, each spouse is liable for repaying their separate debts and their share of community obligations.
Rules Governing Liability of Marital Property
In general, the rules concerning the liability for marital debts revolve around the community or separate character of the property that can be used to satisfy the debt. Texas Family Code § 3.202 governs the liability of a spouse’s community and separate property for certain obligations.
Under Section 3.202, creditors of a spouse cannot reach the other spouse’s separate property to satisfy marital debts, unless both spouses are found liable for the debt. For example, money from a savings account a wife funded before getting married cannot be used to repay student loans the husband incurred before the marriage.
Additionally, a spouse’s share of community property is not liable for the separate debts incurred by the other spouse before the marriage or any nontortious liabilities the other spouse incurred during the marriage. Thus, for instance, the husband’s share of a joint bank account cannot be used to help pay for the wife’s credit card debt she incurred prior to marriage.
Finally, a spouse’s share of community retirement benefits cannot be accessed to satisfy a criminal restitution judgment rendered against the other spouse.
Characterizing Marital Debts
The liability of a party’s property depends on the character of the debt in question. Like the characterization of marital assets, the character of marital debt depends on when the debt was incurred. As a result, the allocation of marital debts requires courts to determine whether the obligation to repay rests only with one spouse or both.
Any debt incurred during the parties’ marriage qualifies as community debt, and property acquired with the proceeds retains the debt’s community character. For example, if a spouse got a car loan during their marriage, it is considered to be a community debt. Furthermore, the car acquired using the car loan’s proceeds constitutes community property.
However, if the creditor agrees only to take a spouse’s separate property to satisfy a debt incurred during the marriage, it is deemed the spouse’s separate debt.
To Help Resolve Your Legal Issues, Consult Coker, Robb & Cannon, Family Lawyers
If you have legal questions or concerns regarding your divorce, you may want to speak with an experienced attorney from Coker, Robb & Cannon, Family Lawyers. With years of experience practicing Texas family law, we can advise you about the appropriate course of action for preserving your legal rights during your divorce.
Please call Coker, Robb & Cannon, Family Lawyers at (940) 293-2313, or contact our office online to schedule an initial consultation today.