Which Spouse Is Responsible For The Credit Card Debt In A Divorce?

Divorce can be one of the most painful things to happen to a person. Some psychologists believe that divorces are as stressful and as painful as a death in the family.

Divorce not only takes a toll on the two spouses, it can have a very negative effect on children. If they see mommy and daddy fighting over their assets or waging battles over child custody, the kids may end up feeling scared and vulnerable.

The best type of divorce

The best type of divorce is one where the two parties sit down together or with the help of an arbitrator or mediator and hash out an amicable settlement. Unfortunately, this is often not the case, especially if there are thousands of dollars in assets or a pile of debt at stake.

Which spouse is responsible for the couple's debts?

The answer to this question depends on several factors but mostly on the state in which you live. In non-community property (or equitable division) states, the court will often take into account the debts that each spouse brought into the marriage and which spouse was responsible for which debts. However, in common property states such as California, Arizona, Wisconsin and Washington, everything in the marriage, including your debts, are considered to be owned jointly. This means you could actually be held responsible for your spouse's credit card debt.

Try to work out a settlement yourself

The best answer is to not have any joint debt when you divorce. The second best answer is to sit down and work out a settlement yourselves. One of you could agree to take all the debt but get some extra assets as compensation. You could agree to split the debt 50/50. If you had separate credit cards you could agree that each of you will take responsibility for paying off your own cards.

Be sure to to file documentation with the court about your debt and joint credit cards as early as possible so you will have everything on the record.

When this fails

If the two of your can't agree on how to divide your debts, you'll have to have your attorneys or a mediator help you negotiate a agreement. In the worst case, when all else fails, the court may have to order a settlement – that could leave both of you feeling angry.

You can run but you can't hide

Do the two of you have a lot of joint credit card debt? Then it's important to understand that credit card companies aren't bound by divorce decrees. Your ex-spouse might have been ordered to pay your credit card debts but if he or she either refuses to pay up or declares bankruptcy, the credit card companies can come after you. And not just for the full amount owed but also for any penalties or interest.

If you can't settle, cancel the credit cards

If the two of you can't come to an amicable agreement as to which spouse is responsible for your debts, you might want to cancel all your credit cards. This is especially true if you have a very angry spouse. It's sad but true that angry spouses have been known to run up thousands of dollars in credit card debt as a sort of "take that, you scum of the earth!"

Why equal responsibility is bad

The worst way to handle debt is probably to take equal responsibility. It can be bad because it keeps the two of you entangled. You are forced to keep communicating with your ex-spouse after the divorce. Plus, you run the risk that he or she will try to take advantage of you.