Am I responsible for my spouse’s credit card debt in a divorce? In many cases, the answer depends on how the debt was incurred and whether you live in a community property state or an equitable distribution state.
Some debts may be considered joint marital obligations even if only one spouse’s name is on the account, which can create unexpected financial responsibility during divorce proceedings. Understanding how credit card debt is classified is critical so you can protect yourself and make informed decisions as you divide finances.
Who pays credit card debt in a divorce?
During a divorce, you’re liable for any credit card debt in your name. If you have an individual card you brought into the marriage and incurred debt on it, you should expect to pay it off, especially if it’s solely in your name.
However, if you have a joint card or co-signed on your spouse’s card, you may also be responsible for that debt. Where you live plays a significant role in that decision, depending on whether you live in a common-law state (there are currently 41) or community property state (there are currently nine).
According to attorney Travis Christiansen of Boyak Christiansen Legal Solutions, “If you live in a community property state or are joint signers on a credit card account, both partners are responsible for the debt as long as it occurred after the marriage began.”
In common-law states, you’re usually responsible for debt in your name and joint debt. It is important to remember that you may experience exceptions to this rule.
➤ LEARN MORE:What is the difference between a credit card joint account holder and an authorized user?
Is a spouse responsible for credit card debt?
Unfortunately, who is responsible for credit card debt in divorce isn’t always cut and dry. Common-law and community property states are typically clear on liability, but that may be able to be challenged in court.
If you can argue you weren’t aware your ex was racking up debt, for example, you may be able to fight for an equitable split. Christiansen notes, “A judge could assign credit card debt during a divorce. Often, even if the credit card is in one spouse’s name depending on other circumstances like income and who ran up the debt, a judge may divide the debt by a certain percentage for each person. If the credit card debt was incurred before separation and was for family expenses, it is likely that it will be divided between both spouses.”
Unfortunately, if a judge rules that you’re not liable for a certain debt and determines your ex is culpable, you may not have instant relief. The decision doesn’t impact the agreement you have in place with a credit card issuer. If your name is on the application, the bank can take action against you. In this case, you may be able to sue your ex for the debt.
Strategies for managing credit card debt during a divorce
Credit card debt is never a fun thing to manage. It can become more of a problem during a divorce, particularly if you and your ex aren’t on the same page financially.
Here are some simple steps to mitigate credit card debt during this traumatic time:
Track your spending: Tracking your spending isn’t just for budgeting. Keeping a close eye on spending can be an excellent way to show a judge who is spending what on open credit cards.
Remove your ex as an authorized user: The last thing you want is for your ex to continue spending on your credit card. Call all issuing banks and ask to remove your ex from your account. This assures no unauthorized spending will continue.
Change your account numbers: This is of particular importance on your individual cards. If you ever used your ex’s phone or computer to make purchases, changing account numbers protects you against unwarranted spending.
Financial inaction is not a solution during a divorce. You must act to protect yourself and your children if you have any. Active communication with credit card issuers is essential. If you don’t inform them of the divorce, they won’t know why payments may have been missed.
According to family law attorney Jaime N. Berger, Esq of Jacobs Berger, LLC, “It may be prudent in certain scenarios to contact the bank/credit card company and advise them that you want notifications of any charges over a certain amount so you can monitor the spending during the divorce process.”
➤ LEARN MORE:How to handle credit cards following a divorce
How to protect your credit score during a divorce
Divorce doesn’t directly impact your credit. However, outcomes from the divorce can have a significant impact on your credit score. Following these prudent steps can help stem the tide.
Regularly check your credit reports
Reviewing your credit reports is essential during a divorce. This helps you identify if your spouse opened accounts in your name without your knowledge or if there are any late/missed payments. This step can also help you determine if a credit freeze is necessary.
You can check your credit reports for free at AnnualCreditReport.com.
Consider closing joint accounts
Closing joint accounts will have a temporary impact on your credit score, but it can help avoid additional debt. It can also help you sever financial ties to your ex.
Communicate with your ex
It’s understandable to experience missed or late payments during a divorce. Communicate with your ex so both of you are on the same page. This may help avoid missed payments, which is beneficial to both parties.
Speak with a credit counselor
Depending on the state of your indebtedness, getting help from a counselor or financial advisor may be beneficial. This is of particular importance if you are a victim of financial abuse. Make sure to get recommendations from your attorney, and don’t pay needless fees to receive assistance.
Frequently asked questions about credit card debt and divorce
Figuring out how to split credit card debt in divorce isn’t always easy. These are common questions people have when going through a divorce.
Can I sue my ex for credit card debt?
Yes, it is possible to sue your former spouse for credit card debt under certain circumstances. Berger notes, “If a spouse does not find out about credit card debt until later on when perhaps the debt is not being paid, and it is impacting upon their credit, they may be able to sue their ex-spouse for failing to disclose it or pay what was agreed upon.” Essentially, if the debt isn’t divulged, it’s possible to sue.
Am I responsible for my spouse’s credit card debt in a divorce?
Unfortunately, you may be liable for your ex-spouse’s credit card debt in a divorce. If you live in a community property state, you may be responsible for up to half of the indebtedness. Moreover, if you have a joint or co-signed card, you may also be responsible. If the card is in the ex’s name only, and the debt wasn’t for household expenses, you may not be responsible.
Is credit card debt split in a divorce?
Credit card debt is typically split during a divorce. However, where you live and the reason for the debt may impact who is ultimately deemed liable for the indebtedness.
What are the community property states?
The nine community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.
Does a divorce decree protect me from creditors?
No. A divorce decree only allocates responsibility between spouses; it does not change your legal obligation to creditors. If your name is on a credit card or loan account, the creditor can still pursue you for payment regardless of what the divorce decree says.
Can I remove my name from a joint credit card account?
In most cases, no. Credit card issuers typically will not remove a name from a joint account unless the balance is paid in full or the debt is refinanced into a new individual account. Otherwise, both account holders usually remain legally responsible.
What if my spouse ran up debt without my knowledge?
You may be able to challenge liability depending on your state laws and whether the debt is considered marital. However, from a credit reporting standpoint, you should also dispute any unauthorized accounts or charges with the credit bureaus and the creditor, especially if there is evidence of fraud or identity misuse.
The bottom line on credit card debt in a divorce
The divorce experience is often rife with emotion and awful legal proceedings, and credit card debt can make the situation worse. Attention to detail and purposeful action are vital to protect yourself and your credit during this time. Pairing that with clear communication with your ex-spouse is the best course of action to know what you’re liable for financially.
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