No matter how long you and your spouse were married, it’s likely that, at some point, you encountered financial challenges in your life together; most married couples do. You were hopefully able to overcome any temporary crisis, whether it was a reduction in income or some unexpected expense, such as medical bills or car repairs. Finances are part of everyday life. And, if you’re preparing to file for divorce in a Texas court, it’s important to understand the financial implications of the decision.
Texas is one of nine states throughout the country that operate under community property guidelines in a divorce. This means that the judge overseeing your case will undoubtedly divide all of your marital property 50/50 between you and your ex. Numerous issues may be pertinent to your proceedings, and the more you understand ahead of time, the better able to protect your interests in court you might be.
Your home is no doubt one of your most valuable assets
In some cases, a pair of spouses might agree that, after divorce, the home they shared during marriage will be in one person’s name only. In order for this to occur, refinancing of the mortgage must first take place. If you are the spouse who wishes to keep the house, you must qualify for the new mortgage on your own.
You and your spouse might choose to sell your home instead, in which case you would be able to split the proceeds.
Retirement benefits and investments
If you secure a Qualified Domestic Relations Order (QDRO), you might have access to a portion of your ex’s 401k or other retirement benefits. Other financial issues, such as the value of stocks and bonds, etc., may also come into play during property division proceedings.
Bank accounts, credit card accounts and loans
It’s always a good idea to separate finances as soon as possible when you decide to divorce. This might include closing any jointly owned bank accounts you might have. The same goes for credit card accounts.
If there is a debt owed on a jointly owned credit card or a loan that you and your spouse obtained together during marriage, the court will divide a share of liability between you. Closing jointly owned credit card accounts is a good idea, even if you haven’t paid the card off, because it prevents someone from making additional purchases in your name.
Spouses can sometimes trade assets
The court considers the value of assets when determining how to divide marital property in a Texas divorce. You can’t split a car in two, for instance, but a judge might decide that it’s fair for you to keep the car while your spouse receives an asset of equal value.
No two settlements are exactly the same, and you and your ex may be able to negotiate customized terms of agreement and then seek the court’s approval. A divorce always has financial implications, but if you understand state guidelines and know where to seek support to help protect your interests, you may be able to achieve a settlement in a fair and peaceful manner.