Handling Credit Card Debt In A Divorce

Most individuals own at least one credit card, and it is not uncommon to accumulate a significant amount of debt on these accounts. Therefore, if you are separated or getting a divorce and are not sure what to do about credit card debt, it is essential to understand your options and the steps you should take moving forward.

Who Owns the Account?

If the debt is on a credit card with only one spouse’s name on it, that individual may be fully responsible for the debt. However, the debt can also be considered marital property and both spouses’ responsibility. This may depend on who incurred the debt, when and why. For instance, if a spouse accumulated the debt because of wasteful spending, it may be his or her responsibility. However, if it was accumulated to pay for household expenses, both spouses may be liable to pay it.

If you and your spouse are in disagreement over who owns the credit card debt, you may need to ask the judge to determine if the debt is part of the marital estate.

Close Jointly Held Accounts

The general rule for jointly held accounts is that the assets and debts are marital property. If you have jointly held credit card debt with your spouse, the best way to handle it is usually for each spouse to transfer half of the debt to his or her own personal account. This may mean each spouse opens a new credit card and transfers 50 percent of the debt to it. Then, the joint credit card can be closed.

If it is not possible to close the joint accounts with your spouse, you might need to wait until a court order demands it. Your divorce attorney will specifically address the debt during the proceedings to ensure no joint accounts exist past your divorce.

Stop Using Jointly Held Cards

Once you and your spouse have separated, it is best to discontinue using jointly held accounts if you cannot close them. You need to make sure that you and your spouse continue to make minimum payments toward the debt, but otherwise you should use a new, personal credit card.

You may also need to monitor credit card use on jointly held accounts to ensure your spouse does not rack up a considerable amount of debt while you are separated. You will be able to show that the debt is not yours, but this can be a court battle.

Record Your Spending

Once you have separated from your spouse, it is advised that you carefully record your spending and payments made toward jointly held debt. Your attorney may need to show that you have made your best effort to pay down debt and to not increase any marital debt. Your records may also help show debt created by your spouse following your separation is solely that person’s responsibility.

Contact a Naperville Divorce Attorney

If you are not sure how to handle the debt you accumulated during your marriage, call our office right away. The skilled DuPage County divorce attorneys at our law firm will work with you to determine all of your credit card accounts, close jointly held cards, and handle any other related issue that arises during your divorce. Contact us at 630-655-7676 to learn more about how we can help you throughout this time.

Sources:

http://www.ilga.gov/legislation/ilcs/ilcs4.asp?ActID=2086&ChapterID=59&SeqStart=6000000&SeqEnd=8300000

http://www.creditcards.com/credit-card-news/help/dividing-credit-card-debt-divorce-6000.php