How the courts split the credit card debt on divorce
We all know that divorce does not come easy on either of the partners. While you experience strong emotions, there are the credit card bills during a divorce. That’s right! After all, most couples owe large sums of money through credit card transactions for necessities or maybe even some luxuries. These bills may seem negotiable when you are in a happy marriage but as soon as the marriage falls apart, who is entitled to pay all those loans and payments? Which payments are to be made by whom? How to make your spouse pay his/her share of the debt? Credit card companies do not consider you divorce terms and agreements so they can very easily come after you or your spouse even if it’s a joint debt which is why divorce attorneys and financial advisors always recommend not leaving your marriage with any debt withstanding. The consequences of going back to being single with all the debt lying on your shoulders is not only painful but a continuous worry to deal with, so it’s better to settle all your debts beforehand. Divorce is not only a painful process but an emotional turmoil as well when you do not think rationally about settling debts at that particular time, which is why many divorcees end up in trouble and under debt.
There’s a long list of questions concerning debts after divorce. Let us look at the answers of all your divorce problems and questions.
Family Courts and Bills
First of all, have a very clear and accurate understanding of all the bills and financial statements coming in your house to know you exact economic status. Both spouses should equally have access to all the financial data so as to know where they stand. A divorce cannot wait like debts.
One of the most important aspects of mutual finances are the assets you collectively or individually own. Generally the court evaluates the standing and divides the assets between the spouses such as property or real state equally. Or even balances out by increasing the debt of the person who receives more property.
While filing for divorce, it is very important to know that every state has a different criterion to divide and distribute. Some states view the assets on individuality that who brought what to the family while others view it as an equally owned wealth.
Even if you are not liable for the credit card debt because the card is not in your name, the family court can still assign the obligation to you since you have jointly owned whatever is bought from that debt. If a credit card is assigned to you that does not contractually make you liable to the card company. This is only because the family court cannot change the terms of the credit card contract made initially. But if you fail to pay that debt and do not respond to any notices, the ex-spouse can sue you for violating the divorce terms and can demand compensation in the form of money at any point for the damages suffered.
When your former spouse doesn’t/cannot pay
Sometimes, the spouse is not in a position to pay and other times they don’t pay just to cause trouble. In such cases, the creditors come after the souse who is responsible, though it may seem unfair since the loans were entitled to both, but still, if the verdict was given for the spouse to pay credit card debts, he/she has to pay.
In that case you can always petition the court to enforce divorce agreement and ask the spouse to appear in court and explain why the debts aren’t being paid. It is then the courts responsibility to advise ways or dig out possibilities that will enable your ex-spouse to pay the bills.
Another way is if you pay the bills and keep a receipt and later on get it reimbursed from the ex-spouse. For this you will have to inform the family court first and carry on with the proceeding as they advise you to by providing proof of payments made.
Apart from all these concerns, there are a few things that should be kept in mind to avoid such a situation where you have to take care of debts or pay offs alone.
- Immediately see a credit councilor if you are going under debt.
- Use joint savings and pay off all debts together so none of you has to be bankrupt.
- Immediately cancel all the not-discussed, unused credit cards. They only add more confusion to divorce settlement.
- Very carefully and clearly discuss who will pay for which credit card.
- Get expert help from an attorney and a financial planner to sort out the plastic money.
- Keep a detailed record of all the charges once you decide to split up. One copy to yourself and another with your spouse.
- File the documentation with the court for all your credit cards as soon as possible when planning for a divorce, this will not only help you communicate legally but will allow you to make decisions under expert help and guidance.
- Before you decide to split up, make sure there is no debt left unsettled between you and your spouse.
- If you are a cosigner on your spouse’s credit card (even if it’s not a joint credit card account) you are still on the book and liable. So make sure you get off the contract legally before filing for divorce to avoid liability and legal interferences afterwards.
A divorce should not get to you only because of the debts. It is already a difficult time and we ensure to make it less painful by providing you with the best alternatives on how to handle your credit card debts and to guide you in the best possible way to not only get rid of debts but to never think of them again. They will wash away like foam at the shore.