You have to handle many financial challenges during a divorce, including credit card debt. However, just like many other aspects of divorce, determining who is responsible for credit card debt can be complex.
Usually, debt incurred during a marriage is the responsibility of both parties, but only if they’re co-signers on the credit cards. However, if the credit card is in your name and the other spouse is just a cardholder, you will be responsible for that debt.
You may be responsible for your spouse’s debt
During the divorce proceedings, the judge may reassign debt to you, even when you’re not directly liable for it. For instance, the judge may assign your spouse’s debt to you in the divorce decree, depending on what the credit card was used for. The same goes for your spouse.
However, if a divorce decree reads that your spouse is responsible for your credit card debt, it doesn’t cancel your contract with the creditor. This means you can’t provide your creditor with the divorce decree and say your ex is liable for the debt. Therefore, your creditors will still come after you, even with a divorce decree, if the card is under your name.
Close joint credit card accounts
You can handle joint credit card debt in several ways, but the best way is to cancel all joint cards as soon as you know a divorce is imminent. This doesn’t just mean cutting the cards but also calling the credit company to close or remove your spouse from the account. This will help prevent your spouse from taking out additional debt, which you may ultimately have to pay.
When going through a divorce, it’s essential that you take steps to protect your assets and financial interests. Knowing what will happen to your credit card debt and how debt is handled in divorce will help you to better prepare for the process.