Dividing Debts in a Texas Divorce
Debts are often a big issue, and problem, in a divorce. All else being equal, a judge will usually divide debts incurred during a marriage 50/50. There is a common misconception that there are "community debts" or "community liabilities." The general rule in Texas is that liability follows management on responsibility for debts and liabilities for one's spouse and children. Spouses can have direct and indirect legal responsibility for debts or liabilities. Direct responsibility occurs when a spouse signs an instrument or contract obligating himself or herself. A common example would be an application for credit signed by both spouses. Both spouses are responsible for the debt incurred. Indirect liability is based on agency principles and the doctrine of necessaries. Under the Texas Family Code, a person is personally liable for the acts of their spouse only if: (1) the spouse acts as an agent for the person; or (2) the spouse incurs a debt for necessaries. A spouse does not act as an agent for the other spouse solely because of the marriage relationship. The doctrine of necessaries was a part of the common law of the State of Texas, and is now set out in the Texas Family Code as follows: "Each spouse has the duty to support the other spouse. Each parent has the duty to support his or her child during the period that the child is a minor, and thereafter as long as the child is fully enrolled in an accredited secondary school in a program leading toward a high school diploma until the end of the school year in which the child graduates. A spouse or a parent who fails to discharge the duty of support is liable to any person who provides necessaries to those to whom support is owed." What is "necessary" varies from case to case, and is dependent upon one's station in life. At a minimum, necessaries include food, clothing, shelter, and non-elective medical care. The general rules of marital debt liability are as follows: 1. A spouse's separate property is not subject to the liabilities of the other spouse unless both spouses are liable by other rules of law. Again, an example would be when both spouses sign a contract or loan application. 2. Unless the incurring spouse is acting as an agent or is incurring a debt for necessaries, the community property subject to a spouse's sole management, control, and disposition is not subject to: a) any liabilities that the other spouse incurred before marriage; or b) any non-tortuous liabilities that the other spouse incurs during marriage. 3. The community property subject to a spouse's sole or joint management, control, and disposition is subject to the liabilities incurred by him or her before or during the marriage. 4. All community property is subject to the tortuous liability of either spouse incurred during marriage. The Texas Constitution protects the homestead from seizure for claims of creditors except for a purchase money lien; taxes on the property; properly executed liens for home improvements; and owelty in a divorce situation. The Constitution also prevents the garnishment of current wages except for court-ordered child support payments. Liability for Debts and Torts of Children The principal source of liability for parents for the contracts of their children arises from the general duty to support and the doctrine of necessaries, both of which were discussed above. In general, persons under the age of 18 cannot make contracts. A parent is also generally not liable for the torts of a child simply based on the family relationship. There must be some basis for personal liability. A parent can be liable for acts of his or her own negligence, resulting in the child's tort. Common examples would be negligent entrustment of an automobile or firearm. By statute, parents have some liability for the property damage caused by the torts of their children. A parent (or other person having the duty of control and reasonable discipline of the child) is liable for any property damage proximately caused by: 1) the negligent conduct of the child if the conduct is reasonably attributable to the negligent failure of the parent or other person to exercise that duty; or 2) the willful and malicious conduct of a child who is between 12 and 18 years of age. Recovery for damages caused by willful and malicious conduct is limited to actual damages, not to exceed $15,000.00 per act, plus court costs and reasonable attorney's fees. The information in this article is not legal advice on any specific facts. Consult with an attorney about your specific legal rights.