Dividing up marital property is a critical component of your divorce in Texas. Understanding the basic process involved helps you to better plan for your case and your future. Make no mistake, the decisions you make within your divorce will affect your life now and in the years to come. As it pertains to property, much of the work you have performed during your life will come to be relevant in the property division component of your case. For that reason, it is best to have a plan when dividing up this property. Wandering into a discussion on a division of your community property is a recipe for disaster.
Fortunately for you, there are great resources available to help you become better acclimated to this subject. For instance, today’s blog posts from the Law Office of Bryan Fagan involve the subject of student loan division in any Texas divorce. However, before we can discuss the specific subject of student loans it is better to understand how the division of marital property works overall. From there, we will have a much stronger basis of knowledge under which to proceed in this sort of case.
If you have any questions about the material, we are about to discuss then our attorneys are here for you. We offer free-of-charge consultations six days a week. That means any question you have about the world of Texas family law can be addressed to one of our lawyers. With that said, let’s get into our discussion on student loans within a Texas divorce.
How is marital property treated in a Texas divorce?
Marital property refers to property subject to division in a divorce. The marital component of the property involves property that was acquired because of your marriage. For our purposes, we will discuss marital property division as it pertains to Texas. In Texas, our state applies theories of community property to marital property division. Community property maintains a presumption that all property owned at the time of your divorce is subject to division.
However, it is possible to rebut this presumption. Despite the presumption favoring all property at the time of your divorce being community property, it is likely not the case in your divorce that all property is subject to division. Rather, you and your spouse can overcome that presumption with evidence. Clear and convincing evidence would be needed to prove that a particular property or debt is separately owned by you or your spouse. Successfully providing a court with this evidence means that the property in question would be the separate property of you or your spouse. Thus, the property would not be divisible in the divorce.
The community property laws of Texas are not as straightforward as this explanation I just provided you with, however. The rundown of community property law is accurate. However, when we begin to speak about the specifics of your case the process becomes much more complicated. As such, it is recommended that you contact an experienced family law attorney before beginning negotiations in your divorce. What you don’t know can hurt you in a divorce. As a result, decided to reach out to an experienced family law attorney today.
Determining how property is divided in your divorce
Let’s assume that you and your spouse have some work to do when it comes to dividing up your community property. The question you need to ask yourselves is how best to approach this complex subject. The attorneys with the Law Office of Bryan Fagan have a method that we utilize with our clients when it comes to property division. That method is used to go through the property that you own so that you are better able to negotiate on its division.
First, you need to be able to determine all the property and debt that you own and owe. To perform this exercise well every property and debt in existence for your family must be accounted for. One of the most helpless feelings you can have after a divorce is to realize that you and your spouse did not account for a particular debt or property in the analysis of your case. Likely, you would not be able to reopen the divorce to have that property or debt looked at by the court. As a result, you need to take care of this issue during the divorce itself. Failing to do so can leave you susceptible to a great deal of financial pain later.
How to inventory your property
Starting the process involves performing an inventory of your property. We recommend to our clients that they simply walk through their homes and take photos of everything they find. Since most of us own smartphones these days you can walk through your home and take photos of each room, dresser drawer, file cabinet, and closet. Leave no stone unturned. This is a great exercise to go through at the beginning of a divorce. The reason is that you do not know how the rest of your case will go. If you are asked to leave the family home this may be your only opportunity to access the belongings inside your home.
Do not forget to take into consideration the intangible property that you own. Intangible property examples are bank accounts, investments, retirement funds, and cryptocurrency. Make sure that you have account and password information for all your investments and bank accounts. It is somewhat easier to access these accounts even if you are asked to leave the family home. However, you should not assume that you will always have access to this information. Make sure that you print, take screenshots, or otherwise save balance information for each account that you own.
Accounting for your debts in a Texas divorce
Debts are much less pleasant to consider in the context of a divorce when compared to property. Debt is a negative in your financial life. This is true even if you are using that debt to serve another financial purpose. As a result, the debt you owe will be subtracted from the property you own to determine your net worth. That net worth can impact the process of division of your property. The divorce provides you with a snapshot of your net worth at this juncture in your life. Sometimes that can be a difficult realization during an otherwise unpleasant experience in and of itself.
Most of us have debt of some kind in our lives. Student loans are just one type of debt that we may owe. Other examples of possible debts we may owe include a home mortgage, credit cards, home equity line of credit, or car loan. If debt is a major factor in your life, then you need to be sure that you have your arms wrapped around all the debt that you owe. As such, the Law Office of Bryan Fagan recommends to our clients that they take a crucial step at this juncture in their case.
That recommendation involves going through all your debt in a credit report. There are ways to request a copy of your credit report for free online. For many of us, going through your credit report sounds like the least exciting experience possible. However, it is still important to do this even if the idea does not excite you. Why is that? As we are about to see the issues related to debt can dramatically impact you within your divorce. Specifically, some spouses find that they cannot always trust their partners when it comes to handling finances.
Why is it important to be aware of all your debts?
Suppose that you and your spouse are going through a divorce. Since the two of you do not have any children, you can focus all of your time and attention on property division within the divorce case. Those property division questions have so far related to how to divide your property. However, now that the two of you have a better idea of how to divide your property the next question you need to ask yourselves is: how are you going to handle debts in the divorce?
As far as you are concerned, debt should not be a major part of your case. To your knowledge, the only debt that you and your spouse have is your home mortgage. Admittedly, you do not have much in the way of personal knowledge of your family finances. You are a stay-at-home wife. That means that you work domestically but not outside the home. Because of this, you have little working knowledge of the family finances. All you know is that when you need to spend money on groceries or other household items there is always money in the checking account. Any other details of the family finances are beyond your knowledge.
This is what you tell your attorney with the Law Office of Bryan Fagan at the beginning of your case. You fully expect that there will not be many issues when it comes to the division of debt. Our office recommends that you go online and pull a copy of your credit report. If nothing else, doing so can help confirm your prior beliefs regarding the simplicity of your household debts. However, after you pulled that copy of your credit report you were surprised to see some things that you did not expect to. Your household debt situation is much more complicated than you would have otherwise thought.
Handling unexpected debts in a Texas divorce
Specifically, you see multiple credit cards and credit union loans under your name that you were not expecting. Of course, you immediately raised the issue with your attorney. Your attorney from our office reaches out to your husband’s attorney. It is a huge surprise to see this much debt under your name. After all: you are a stay-at-home wife. You do not have any ventures outside the home. With that being true, it is a complete shock that there would be any debt under your name other than the home mortgage.
At first, your spouse is completely unhelpful when it comes to answering questions about these debts. You figure that either your identity has been stolen or your spouse has taken out debt under your name and has not told you about it. In either situation, you are feeling taken advantage of and vulnerable. This is even more so the case now that your husband has been unwilling to speak to you about any matter involving your newly discovered debts. After a few days of trying to ask your spouse for this basic information, it became clear that he is unwilling to provide you with a basic amount of knowledge.
At this point, you and your attorney have a decision to make. Do you allow yourselves to become stonewalled in this information-gathering process? Or do you choose to use the means available to you from a Texas family court and obtain this information? Here is how the attorneys with the Law Office of Bryan Fagan would handle the situation on your behalf.
Using discovery to request information about previously unknown debt
Our attorneys would recommend that you utilize the discovery process to learn more about these previously unknown household debts. Discovery involves requesting information and documentation from your spouse during the divorce. The purpose of these requests would be so that you are better able to learn more about your spouse and their case. Technically, when you request information from your spouse directly on an informal basis this is still discovery. However, in a situation like this where your spouse is unwilling to provide you with information directly you may need to use the formal methods available to you.
Discovery requests allow you to ask for information and documentation. These responses to your discovery requests must be sent back to you within 30 days. From there, your spouse may choose to object to certain questions or respond with the requested information. All told, discovery is a very important step in your case. When your spouse purposely withholds information from you that is not something that you can take lying down. Rather, being proactive in seeking out the information through the court is a wise decision to make.
Eventually, you came to learn that your spouse took out multiple credit cards in your name without your permission. The purpose of taking out these credit cards was to be able to help your husband make purchases for his business. But for the discovery process, you may have never learned the source of the debt in your name.
How are student loans handled in a divorce?
Student loans that existed before your marriage are handled as separate debt for the most part. However, student loans taken out during the marriage are typically community property. One thing to keep in mind Is that a court may consider other circumstances when determining how to classify your student loans. An example of this is when a student loan is taken out that might ordinarily be classified as separate property. If your spouse has benefited a great deal from the awarding of that student loan then he or she may be responsible for paying a portion of it back.
You and your spouse will be given the first crack at dividing your community property and debts. Courts prefer for claimants like yourself to be able to work alongside one another when it comes to dividing up property. Even after a long divorce trial, nobody knows you and your spouse’s circumstances better than the two of you. This is true even though a family court judge will be paying close attention to the details of your case. Negotiation in a divorce is encouraged through both informal negotiations and mediation.
Depending upon the amount of student loans that you owe the division of this debt could be a major factor in your case. Once you verify all the debt that you own come to mediation with evidence. Account statements showing current student loan amounts are important. Additionally, a snapshot of what was owed at the beginning of the marriage is also important.
Student loan division in a Texas divorce
Just because you have questions now about the student loan division process in a divorce does not mean that you will never find those answers. By reaching out to one of the attorneys with the Law Office of Bryan Fagan you give yourself a tremendous advantage for the entirety of your divorce. Our attorneys will walk alongside you. We thrive in advocating for our clients in court but also at the negotiating table. Interested in learning more? Contact us today.
Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan
The attorneys with the Law Office of Bryan Fagan offer free of charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas family law. Before signing a document or negotiating on a subject you do not know well, contact our office. We look forward to the opportunity of serving you during an important part of your life. The Law Office of Bryan Fagan is on your side.
Evan Hochschild was raised in Houston, TX and graduated from Cypress Creek High School. He went on to graduate from Southwestern University in Georgetown, TX with an undergraduate degree in Political Science. While in college, Evan was a four-year letterman on the Cross Country team.
Following in the footsteps of his grandfather and uncle before him, Evan attended law school after he completed in his undergraduate studies. He graduated from St. Mary’s University School of Law and has practiced in a variety of areas in the law- including family law.
Mr. Hochschild is guided by principles which place the interests of clients first. Additionally, Evan seeks to provide information and support for his clients with the heart of a teacher.
Evan and his wife have four small children together. He enjoys afternoons out and about with his family, teaching Sunday school at his church and exercising. A veteran attorney of fourteen years, Mr. Hochschild excels in communicating complex ideas in family law simply and directly.
