Dividing unsecured debts in a military divorce

Dividing unsecured debts in a military divorce

On Behalf of | Nov 12, 2021 | Military Divorce |

Military couples with a Texas residence generally divorce under the state’s community property laws. As residents, the Texas Family Code requires both spouses to accept liability for paying debts used to purchase shared necessities.

As noted by CreditCards.com, if a couple generated debts before moving to the Lone Star State, those outstanding liabilities may classify as community property. Divorcing spouses typically split their shared debts evenly in half.

Verifying a debt belongs to one spouse

Payment receipts may confirm a debt belongs to only one individual. The court may then allow an exception to dividing the balance equally. The court may, however, require proof that the amount in question did not go toward shared necessities.

Buying a spouse a gift on credit qualifies as the purchaser’s debt. If a spouse can show a liability existed before marriage, the court may also not divide it in half. A student loan counts as a spouse’s own debt if he or she signed for it as an individual.

Preserving credit cards after divorce

As reported by Military.com, divorce may cause damage to credit. To preserve the ability to purchase a car or rent a home, spouses may agree to close their joint credit card accounts. With joint accounts, creditors can seek repayment from either account owner.

By closing joint accounts each spouse may apply for new ones in their own name. Shared debts that require dividing may lead to an arrangement to transfer balances from a joint account to each spouse’s single account.

Overall, credit card debts may end in a 50-50 split unless a spouse opened the account before the marriage began. If the card’s owner used it after the wedding to purchase personal items or gifts, however, it may not require division. If its purchases reflect shared necessities, the court may require each spouse to pay half its balance.