Credit debt after Divorce

divorce
by Grant Thornton UK LLP

Credit Card Debt after Divorce

It is true that marriages are made in heaven. But everything drops flat on their butt 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 methods, then we can say – every is well that ends nicely. But if the separation is not so amicable and there is some sourness still left somewhere in terms of an unsettled debts, things can turn both ugly and complex.

One such hard situation arises when one of the partners incur a credit card debt, and the credit card debt after divorce assumes the form of the Damocles sword in the form of collection individuals, constantly nagging either of the ex-spouses to settle the due. The situation is 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 complicated when it comes to joint accounts. But allow us to see the credit card debt after divorce at this point.

Credit Card debt after divorce – mostly in joint credit cards – is generally seen by the lenders as the joint responsibility of the couple. Actually the spouse who did not 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 right after divorce is of little interest to people.

One may feel that closing out credit card accounts (joint) is a solution to all these problems. If you have a responsible spouse, well this will work. But the fact is that the accounts 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 better to worst.

– Sell any joint asset (say, home) and pay the debt and close the account. It is a classic sort of killing two birds with a stone.

– Separate credit cards can be a better option in such a situation. After applying, get the dues moved into individual cards, divided based on 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 living. Take Care!

5 Responses to “Credit debt after Divorce”

  • Hayden:

    I am going through a divorce, it has been almost a year now. I have been paying 2/3 of the debt with 1/3 of our former total income and had been managing to keep my nose above water (barely), then CitiBank raised my rates through the roof (despite the fact that I had been paying the min payments on time all along.) So now thanks to them I am in a negative cash flow, my credit (which was great) is now shot to hell and I just need to know how to put all the creditcard debt on hold until I get the divorce settlement, which HOPEFULLY will be comming soon, but I don’t want my credit to continue to go down hill in the meantime.
    HELP!

    Any tips are welcome…

  • Franklin Bluth:

    Once I pay the house, car, child support and household expenses there is not much left over. I’ve thought about filing bankruptcy but right now i’m doing nothing. What’s the best course of action, do nothing and listen to the phone ring or file bankruptcy?

  • Sriram R:

    Gambler caused 135k worth of credit card debt. Is in ga now and in therapy. I don’t want to get in deeper trying to fix this? what is the best direction to go from here.

  • Cole:

    The divorce is final, and a court order was issued to the ex stating that he has to pay two of the three credit cards we used during our divorce. The two cards are in my name, not his. He paid the first payments, but he has since ceased payments. How do i make him follow the court order? Can I make him take the debts into his own name?

  • morbiusdog:

    I will be soon going through a divorce with my spouse once we figure out if it is necessary to hire an attorney or if we could do it ourselves. We have come to an agreement about the custody and child support of our 4 children, automobile assets and material assets. We rent, so do not own any property. Our concern in our debt. We live in Texas so I’m not sure about other states but I believe debt here is 50/50. We agreed that the credit card debt he accumulated during our marriage (which he spent on his own), will be his responsibility; and vice-versa. It is my understanding that upon that agreement, collectors will go to whom ever is responsible after the agreement. We would like to know if the debt will show up on our credit report. I would like to eventually purchase a house but his debt is quite a heavy load and I do not want to carry that burden…he agrees as well for the benefit of our children to one day establish our own home. Will we need an attorney for this or can we still do this on our own? What steps do we need to take regarding the credit reports and separating debt?

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