When it comes to dividing up property in a divorce, it is easy to think of the assets. But what about the debts? Nobody wants marital debts, of course. But what do you do with, and what happens to, credit card debt when couples get divorced?
Joint Debt and Joint Accounts
It is usually easier when an account is just in one spouse’s name—absent unusual circumstances, that spouse will assume that debt after the divorce is over.
But problems arise with joint debt because no matter who you may decide will pay for and be liable for the debt, the account is still open, in both parties’ names, and in some cases, still open for continuing charges even after the divorce is over.
Closing Accounts
If you do have joint credit card accounts, you will want to do what you can to close the account even before the divorce is finalized. This will not make the debt go away, but it will make sure that your spouse cannot run up charges on the account that you are both legally responsible for.
If your spouse is just an “authorized user,” you should be able to cancel the account without your spouse’s approval.
Removing Spouses From Accounts
To maintain good credit (longer-lasting and older accounts build better credit than newly opened accounts do), you will have to contact your credit card company to see how to transfer the account from a joint account to one in your name only.
Paying the Bill
With a joint credit card, you have a problem: the monthly payment is due every month, and so if spouses are arguing over who pays the monthly bill, and nobody pays it, and there is no court order in place saying who is responsible for paying it, both spouses’ credit will be affected.
You do have the option of negotiating a temporary agreement to make sure that a credit card bill continues to get paid, even before the entire divorce is finalized. If you want to keep a joint credit card open, you can even come to a temporary agreement as to what the card will be used for and what and who is authorized to charge what on the card.
Credit Issues
Even if there is a final judgment or a settlement that says which spouse will pay debts that have been charged on a credit card, that does not change who is on the card itself. In other words, if Husband pays the joint credit card, and later, he reneges on that promise, and the card goes into default, both of your credit will be affected—the credit card company does not care that you have a separate agreement with your husband to pay the bills.
Remember that over the years, you may have accumulated perks from your card usage—miles, bonus money, and other benefits. These are assets that also need to be considered in a divorce.
Get hold of dividing your assets, property, or debts in your New Jersey divorce. Contact our New Jersey family law attorneys at The Law Office of Agnes Rybar LLC today for help dividing property in your divorce case.
Sources
https://www.forbes.com/advisor/credit-cards/how-to-untangle-joint-credit-card-debt-in-divorce/
https://www.experian.com/blogs/ask-experian/who-is-responsible-for-credit-card-debt-in-a-divorce/
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