Legal Question in Family Law in Texas

You can agree to split the assets and debts any way you like. If possible, for any assets owned free and clear that are similar in value, you could divide them equally (i.e., I'll take Property A, you take Property B), or sell each property and split the proceeds.

For any assets that have debts associated with them (like a mortgage), you could also sell them and split the proceeds. If this is not practical, then I would suggest that any debts follow the assets, and if there is a net equity, then whoever keeps the property buys out the other's share of the equity.. For example, if Property C is worth $150,000 and has a $100,000 mortgage, there is a net equity of $50,000. Whoever takes the property would also be responsible for the mortgage, and the person taking the property would pay $25,000 to the other to buy out their interest.

If any debt is currently held in both of your names personally (and not in the name of a business), then this approach has one potential drawback. Even if your divorce decree and marital settlement agreement states that one party will be responsible for payment, if the note or mortgage is still in both of your names, and the responsible party defaults on the debt, then the bank will still come after both of you. This could have a negative impact on both of your credit histories. In order to avoid this, you should refinance the debt in only one person's name, if possible.