Credit Card Debt and Divorce. By: Law Office of Steven B. Chroman P.C. Santa Clarita Divorce


Credit Card Debt and Divorce
By Steven B. Chroman, Attorney at Law

No one wants to admit it or deal with it, but more and more couples have credit card debt issues while contemplating or going through divorce. Often little attention is paid to these debts beyond their being assigned to one spouse or the other in the divorce judgment.

Care must be taken that a spouse will not be held responsible for additional credit card debts incurred by the other, and that each spouse is protected to the maximum extent possible if the other fails to make payments.

Remember: Creditors are not obligated to respect the terms of your divorce judgment.

Assigning Responsibility for Credit Card Debt
Often the parties to a divorce will assign to each spouse the responsibility for specific credit cards and their associated debt. To help ensure that all joint debts are identified, including any credit cards which may have been taken out by one spouse without the others knowledge, it may be beneficial to get copies of the credit reports of the divorcing couple, and to make sure that the debt from any creditor not paid off in full is assigned to one spouse or the other.

Cutting Off Your Liability For Additional Debt
When you divorce, you should make sure that you either close any joint credit cards, or that at a minimum you have your name removed from any joint accounts which will continue to be used by your spouse. This will not end your liability for debts incurred up to that point, but should end your responsibility for any new debts incurred on those accounts by your spouse. Similarly, if you hold any accounts in your own name for which your spouse is an authorized signer, you should revoke the authorization.

Protecting Yourself From Default or Bankruptcy
It is not unusual after a divorce for one spouse to fail to pay off a joint credit card debt, which predates the divorce. If appropriate steps weren’t taken to cut off liability, sometimes a joint account will remain open with both spouses liable for the new charges, even though the new charges are made after divorce. The debt load on these cards, delinquent payments, and any default or referral to a collection agency, will appear on the credit reports of both account holders. The creditor will also be able to pursue either or both account holders for payment, including interest, penalties, and possibly legal fees. The creditor does not have to be fair – if it wants, it can direct all of its collection efforts at the innocent spouse.

Thus, a divorce judgment should include a deadline by which the joint credit card debts allocated to each spouse will be paid off in full, and provide for appropriate remedies in the event that repayment does not occur.

For more information or to schedule your complimentary consultation call the Law Offices of Steven B. Chroman 661-255-1800.

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