Allocating Credit Card Debt During Divorce

When parties are in the midst of a divorce, one bone of contention can be credit card debt. The general rule is marital debt is any debt incurred during the marriage for the benefit of the marriage.

How to Navigate Credit Card Debt During Divorce

When it comes to credit card debt that could be almost anything, but examples include home repairs, furniture, clothes for either spouse and food. If one of the spouses incurs a debt through the misuse of funds for example, an extravagant vacation taken alone or the purchase of an expensive boat, then court may assign that debt to the party making the purchase. Such debt would be characterized as “separate” debt, belonging the spouse who misused marital funds.

Under N.J.S.A. 2A:34-23.1, the state’s equitable distribution statute, the court considers the following sixteen factors when allocating debt:

  • The duration of the marriage or civil union.
  • The age and physical and emotional health of the parties;
  • The income or property brought to the marriage or civil union by each party;
  • The standard of living established during the marriage or civil union;
  • Any written agreement made by the parties before or during the marriage or civil union concerning an arrangement of property distribution;
  • The economic circumstances of each party at the time the division of property becomes effective;
  • The income and earning capacity of each party, including educational background, training, employment skills, work experience, length of absence from the job market, custodial responsibilities for children, and the time and expense necessary to acquire sufficient education or training to enable the party to become self-supporting at a standard of living reasonably comparable to that enjoyed during the marriage or civil union;
  • The contribution by each party to the education, training or earning power of the other;
  • The contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property, or the property acquired during the civil union as well as the contribution of a party as a homemaker;
  • The tax consequences of the proposed distribution to each party;
  • The present value of the property;
  • The need of a parent who has physical custody of a child to own or occupy the marital residence or residence shared by the partners in a civil union couple and to use or own the household effects;
  • The debts and liabilities of the parties;
  • The need for creation, now or in the future, of a trust fund to secure reasonably foreseeable medical or educational costs for a spouse, partner in a civil union couple or children;
  • The extent to which a party deferred achieving their career goals; and
  • Any other factors which the court may deem relevant.

If you or someone you know is planning to separate and has questions regarding the family’s credit card debt during divorce, please contact the Law Offices of Lyons & Associates, P.C. Our skilled team of attorneys are here to help you. For a free consultation, please contact us online or call us at (908) 575-9777.