Debts (like assets) are community property in Texas. If her loan debts were accrued during the marriage then the debts are owed by both you and your wife. Your wife would only be responsible for your student loans if those loans were accrued during the marriage.

In Texas, upon divorce, the divorce Court shall order a "just and right division” of the property (assets and debts). Most people assume that means 50/50. But actually it means whatever is appropriate given the specific circumstances to the case.

There are several cases that address this very issue, bottom line is that you can be held responsible for a "just and right" amount of her student loans. And the worst part is you have no claim on her future increased earnings that she will get as a result of the better income potential she has attained having gotten an education. The textbook example of this is when a guy (med student) is married to a woman who works 3 jobs as a waitress to support her husband while he is in med school. Then once he starts practicing he divorces his wife and finds a younger girl to remarry and start his life as a doctor. The first wife can be held responsible for the med school student loans but has no right to get any of her ex-husband's future earnings.

I assume that both you and your wife have lived in Texas since the beginning of your marriage.

You should consult with a divorce lawyer to get a more in-depth response to your specific fact situation and analysis of how the Judge who will be presiding over your divorce will treat a case like this.

Good Luck!

Give us a call (210) 979-9777, one of our lawyers can help you with your case.

Each spouse is liable for repayment of the debts they incur unless the other spouse cosigns or guarantees the debt or the debt is for the acquisition of "necessaries". Typically necessaries are food, clothing, and shelter. I am not sure whether the education acquired with student loan can be characterized as an acquisition of a necessary. It could be. For you to be liable for the debt, the creditor would have to prove that the education purchased was a "necessary."

If you did not cosign or guarantee her loan, then giving her your share of the house in exchange for something that you only might be responsible for repaying (your "half" of her student loan) is probably not a good deal. You need to understand that if she defaults, and the creditor sues you for repayment and successfully proves that the loan was for a necessary, you will be liable for the full balance of her student loan. Whether she "forgave" that debt is not binding on the creditor. The practical question is whether a creditor would be willing to go to the expense of hiring a lawyer and taking you to court to prove whether or not this education was a necessary.

Since creditors are not party to the divorce, any provisions regarding who agreed to pay what are not binding upon them. They will not care and will go by the contract they have with the debtor. Thus, the student loan creditors are much more likely to pursue the makers of those loans for repayment and ignore any agreements or rulings made in the divorce.

If you accepted her offer, you would give up your half of the equity in the house in exchange for a debt for which you may not held liable. However, if you were held liable, it would be for the full amount of the debt and not half.

Much more relevant to your situation than student loans is the mortgage loan on the house. If you are going to give up your share of the equity, and your name is on the mortgage, the loan should be refinanced so that you would not be liable for repayment if she defaulted after the divorce.

The short answer to your question is that you should not be doing this without a lawyer. Any divorce involving substantial debt needs the attention of an attorney sensitive to family law as well as debtor/creditor law.