Divorce and Credit Card Debt

 Posted on May 27, 2012 in Family Law

In the United States, credit card debt is a large portion of a divorcing couple's debt; depending on the type of account, each spouse may carry the debt long after the divorce is settled.

If you are listed as an authorized user on a a credit card, you are not held liable by the issuing bank for the debts charged on the card.  Only the card holder will be held responsible for the debts.

If, however, both spouses are listed on the card account as joint card holders, each will be held responsible for paying the debt on the card.  In that case, it is vital that each spouse speak with their divorce attorney to create a plan for each spouse to pay down the debt together before the divorce is finalized.  Another option would be to close the account and transfer the balance to a card held in only one spouse's name.

It's a good idea to decouple the debts for each spouse before or during divorce proceedings.  In order to do so, the card holder simply has to call the card company and ask that the authorized user be taken off of the card.  Decoupling will protect the other spouses's credit during and after the divorce proceedings.

Even if the card holder forgets—or purposefully forgets—to take the authorized user off of the account, the authorized user can also call the credit card company to ask to be removed from the account.

When both spouses choose to remain on the credit card account, remember that no divorce decree can supersede the agreement that you have with the credit card issuer.  To protect yourself, first seek the services of an experienced divorce attorney.