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!