Divorce is already emotionally taxing. Plus, having a debt (such as a mortgage debt, credit card debts, or a car debt, etc.) is enough to rub salt in the wound. During separation, assets as well as debts are divided between the couple.
So, today, let us discuss how credit card debt is divided, who is responsible to pay the credit card debt, how the credit card debt gets settled upon divorce, and so on.
Come and clear your doubts while we discuss...
Depends on the following factors:
Before we proceed, remember, credit card companies are not concerned with who’s going to pay the debt. They’re only concerned about getting the money you owe. However, if you’re not liable, you won’t be forced to pay the debt.
Take a look at these situations to understand how to handle credit card debt as a part of your divorce settlement:
And your spouse is the primary cardholder, you’re not responsible to pay for the credit card debt. You’re liable to pay for the credit card charges only if you are an individual or joint account holder.
Don’t worry about paying off your spouse’s credit card debts unless you live in a community property state. It’s because debts are distributed equally (50/50) here. Even if you’ve not racked up those debts, you’ll be hold responsible for the charges.
Both you and your spouse are equally responsible to pay off the credit card debts. So, pay off your debts first and then file for separation. Or, you can transfer the debts on the joint credit account to an individual credit account in one partner’s name.
If you keep the joint credit account active, tell your spouse to inform you beforehand in case he/she is unable to make the payments on-time. So, that you can make the payments and protect your credit from falling down.
You can file a petition in the court against the divorce agreement. Following that your spouse have to appear in front of the attorney and explain why he/she is not following the court order. If found guilty, he/she may be fined or sent to jail.
Generally, the person who has primarily opened the credit account is liable to pay off the credit card debt. Though who will pay what largely depends on where you live. Also, if you’re an authorized user on a credit card, pay only the balance that you have used. If you pay your former spouse’s debt, keep all the documents with you.
If you’ve incurred huge marital debts on joint credit accounts, use the marital funds to pay off the debts. If you have a joint savings accounts or sell the marital home use the money to settle your credit card debts.
Whatever you do, take a professional advice before taking the plunge. Also, solve any joint financial issue before signing the dotted line.