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Divorce is rarely a positive experience, but one of the things that can make it even more complicated is credit card debt. You might think getting a divorce is making a clean break from your ex-spouse, but if you have credit card debt in both your names, it might not be that easy.
Who Is Responsible for Credit Card Debt Once I Get a Divorce?
When you get a divorce, you are still responsible for any debt in your name. That means that if you and your spouse had a joint credit card, you are just as liable for that debt as your spouse.
But the details of how that debt is handled can vary a bit depending on the state you live in. Most states follow "common law," which means that a court will hold you responsible for any credit card debt that is solely in your name, and will hold you jointly liable for credit card debt that is in both your name and your spouse's name.
However, there are nine states—Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin—that do things a little differently. These states go by "community law," which means that any property and debt accrued during a marriage are split between spouses after a divorce. That includes credit card debt—even credit card debt that is only in one spouse's name.
Finally, a judge may have even more leeway to determine who is responsible for what. For example, if your spouse has credit card debt on an account only in their name, a judge may still order you to pay part of it, depending on what it was used for or other circumstances in the divorce ruling. So if a judge rules in a divorce decree, which is legally binding, that you are responsible for debt that is not in your name, you are required to pay it. The same goes for your spouse: If they are required to pay debt that is solely in your name, that is binding.
But that does not mean that your credit card issuer won't come after you if it's not paid for. The agreement you have with a card issuer is that you are required to pay that debt. So even if your spouse is supposed to help you pay down credit card debt in your name, if they don't, you are still on the hook for it. The creditor will come after you.
How Can I Protect My Money During a Divorce?
The best thing you can do is to try to reduce as much of your joint debt before you start getting lawyers involved to make your divorce agreements. If you are unable to make credit card payments during the divorce process, call your credit card issuer to see if they will work with you. And it's best to stop using joint credit cards to make new purchases. In fact, you may want to close the joint cards during the divorce process so no new debt is incurred in your name.
You may also want to remove your name from joint or cosigned credit cards before the divorce. Of course, this is not always easy. You may not be the main user and have authority to do that, or the bank may decide that only one income on the account is not sufficient.
If you're trying to remove yourself from an account after a divorce decree—like in the case of your spouse being ordered to pay it in full—you may still encounter some problems. Your credit card issuer may not simply agree to remove your name even if a divorce decree dictates that your spouse is liable for the debt.
How Will the Divorce Impact My Credit Scores?
Your credit scores belong to you and are based on your history, not your spouse's. However, the actions you take during marriage with your spouse can affect your credit scores, like taking out new joint loans, such as a mortgage. If you have joint accounts, any late payments or delinquencies will impact your scores. So if your spouse is required to pay down the debt on a joint card and makes payments late or skips them altogether, your credit will be affected. That's why you should try to get yourself removed from these accounts so that their negative actions won't affect you after the divorce.