If you were married, and had credit cards, and your spouse maxed them out-what relief could you hope for through a divorce? What steps could you take to protect your interests before or during the divorce process? This blog helps you understand how you can minimize your responsibility for credit card debt amassed during your marriage.
What to Expect from Credit Card Companies
The answer is pretty straightforward: little, if any, relief-unless you can prove fraud or purposeful dissipation of marital assets. Typically, if you had joint credit cards with a spouse, the credit card companies will hold you jointly responsible for all obligations. The liability you have for credit card debt is customarily “joint and several,” which means that you can be held responsible for the entire debt, even though the charges were made by your spouse. And even if you get a court order requiring your ex-spouse to pay all credit card debt, that order is not binding on the credit card company, only on your ex-spouse.
Furthermore, if a credit card is in only one spouse’s name, both spouses can still be liable for the debt if the expenditures were for marital-type activities such as food, car repairs, family vacations, etc.
What You Can Do to Minimize Your Exposure
The best approach is to end your marriage with no credit card debt, though this can be difficult to do. It will be in the interests of both parties, however, since you will both be responsible for all debt on any cards held jointly. If you cannot pay off the credit card debt before your divorce is final, you can agree to divide the debt and to transfer it to new cards that you hold individually.
If you can get your spouse to agree to divide the credit card debt, you will benefit from keeping detailed records of all amounts spent on joint credit cards before and after divorce proceedings have been filed. Once you know that you will be filing for divorce or will be served, you should immediately call your credit card companies and alert the cards that you do not authorize any inordinate expenditures. If you cannot cancel the cards, you should have your attorney file documentation early in the divorce process, showing the court what joint credit cards exist, as well as what debt is on them, so that any new debt can be identified.
If you have joint savings that will pay off the credit cards, it may be in your best interests to use that money to rid yourself of the credit card debt. Otherwise, you may have creditors hounding you long after your divorce is final.
And finally, in this day and age, you and your spouse may want to consider bankruptcy if the debt is overwhelming.