Credit Card Debt During Divorce and After Divorce
Credit card Debt is something that most couples carry before, during and after marriage. It is something that our modern society uses on a regular basis. Many people no longer keep track of how much they make, but they simply use their credit cards to purchase the things that they need when they need them. This can cause problems when a couple comes to the point of divorce.
Who should pay for the credit card debt?
Can I still use our joint credit cards to pay for living expenses? Think about gas and groceries. What about diapers for the children? All of these things become an issue during divorce.
Essentially, what happens is that joint credit cards should not be used anymore. You should take out new credit cards for you personally and you should only use those. This keeps you from incurring new joint debt. In Utah, joint credit cards that were used for the marital estate should be divided equally. If one person used the credit card to purchase something just for themselves there might be an exception to that rule; however, the common general rule is that each person will pay one-half of the jointly incurred credit card debt.
Both you and I know that everything seems to fall part once a marriage hits the rocks. Every bit of reconciliation fails and divorce seems to be the only way out. If everything – both financial and other aspects – is settled before parting ways, then we can say – all is well that ends well. But if the separation is not so amicable and there is some sourness left somewhere in terms of an unsettled financial debt, things can turn both ugly and complex.
One such difficult situation arises when one of the partners incur a credit card debt, and the credit card debt after divorce assumes the form of a Damocles sword in the form of collection people, constantly nagging either of the ex-spouses to settle the due. The situation is a bit tricky here because whether the person who incurred the debt or the other ex-spouse has the real responsibility of making the payment is still not defined clearly by the law. The situation gets more complex when it comes to joint accounts. But let us see the credit card debt after divorce now.
Credit Card debt after divorce – mostly in joint credit cards – is generally seen by the creditors as the joint responsibility of the couple. So even if you get a divorce decree in place, the creditors meaning the cred card company that you owe money to will not really accept the decree. This is why it is very important to have joint accounts closed as soon as they are paid off. Actually the spouse who didn’t incur the amount is not liable to pay, but the credit card company may seek payment from both the parties as they care only about the money due to them. What settlement had been reached after divorce is of little interest to these people.
One may think that closing out the joint credit card accounts from your marriage is a solution to all these problems. However, if you have debt on the joint credit account, you have to pay off that account in full before you can close it. Even if you have settled your divorce case completely and your ex is supposed to pay it in full – you are still on the hook if the debt has not been paid in full and if the account is not closed. Usually, if you have a great divorce lawyer, they will put language into your divorce decree that specially states that neither you nor your ex can use any joint credit accounts to incur any new debt. This way, if your ex tries to do something nasty, you can hold your ex’s feet to the fire with an order to show case proceeding. Call our office for more information about this.
If you have a responsible spouse, well this will work. But the fact is that the account does not cancel itself until somebody makes the payment. Also, after divorce, it is legally not practical to divide the debts. Hence these are some practical solution, from best to worst.
– Sell any joint asset (say, home) and pay the debt and close the account. It is a classic example of killing two birds with a stone.
– Separate credit cards can be a better option in such a situation. After applying, get the dues transferred into individual cards, divided according to your own logic or the way you spent.
– In this regard, if one of the spouses is not qualified to get a card, get one of the relatives to cosign the card before transferring the share of balance.
But, rather than being through this ordeal, the best option is to get yourself everything settled before divorce. It is always a pain to go behind all these joint issues when you are about to start a new life. When you are ready for divorce, or if you need to modify an existing divorce case, give our office a call. We are happy to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 876-5875