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Divorce and debt lead to concerns

On Behalf of | Feb 23, 2022 | Divorce

Asset distributions remain a critical focus of divorce proceedings, but dividing assets may reflect only part of the whole financial picture. Married couples might have debts, and addressing those obligations could become a matter of contention in a Texas family court. Those going through a divorce might wish to learn how the courts address debts.

Debt and divorce

Questions will likely arise about whether the debt is jointly held or exists in one spouse’s name. Likely, solely held debt may remain the responsibility of the person who ran up the balance. However, an agreement might lead to the responsible party receiving some funds to cover the costs.

Other factors could contribute to the allocation of debt payment responsibilities, including means and income. If one spouse has a far higher earning potential, a judgment may award more debt obligations to that spouse. Factors similar to why someone receives a particular amount of spousal support could impact debt payment distributions.

Addressing debt during negotiations

Reaching an amicable divorce settlement could help couples avoid problems and stress associated with debt obligations. Both parties might work together on an equitable solution to debt payments, along with child custody, alimony, asset distribution and more. The court would have the final judgment, but both parties could expect the court to rule favorably on a reasonable outcome.

Spouses don’t always agree easily when negotiating a divorce settlement, but this doesn’t mean going to court becomes unavoidable. Non-binding mediation proceedings could help the spouses agree to a settlement. Such a process may be less costly than arguing in court and might lead to a swifter conclusion.