Married couples often take on debt together. With their combined incomes, they may be able to afford more than before. One of the most common debts a married couple will share is buying a house. But even more common is shared credit cards. Since most couples will “marry” their finances, this may seem like a logical move. But if they decide to divorce, they may find that their debts are still coupled–’til death do they part.
If you and your spouse both have your names on a credit card, you are both responsible for the balance on it–even if you get divorced. This can add to up to big trouble, especially if the divorce is contentious. A divorce can bring out the worst in people, and settling debts can get ugly. But there are ways to settle credit card debt that will be fair to both parties if you can work it out together.
The first step is to request a copy of your joint credit report. Looking through it together, decide which debts are individual and which are shared. If possible, pay off all of your shared debt as soon as possible, and cancel those credit cards immediately. If that’s not possible, make a plan: offer to take responsibility for the debt in exchange for a greater share of the assets in the divorce. But take heed–even if your spouse has agreed to pay off your credit cards, he or she could still default, and you will still be liable.
A Guide to Credit Card Debt and Divorce
On your wedding day, you probably weren’t thinking about the potential financial issues of a divorce. But you need to protect yourself no matter what the outcome of your marriage. The best thing you can do is be aware of the financial consequences, and prepare a plan to handle them.