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How is credit card debt split in a divorce?

On Behalf of | Apr 23, 2020 | Firm News

When it comes to divorce and finances, most couples are concerned about how to divvy up their shared assets. If you and your spouse frequently used credit to pay for things during your marriage, the question of how this debt may be handled will also arise.  U.S. News & World Report explains how this common issue is often handled. 

Common law vs. community property states 

Most states in the country subscribe to common law when it comes to debt and divorce. In these states, the person whose name is on the credit card is solely responsible for paying off the debt. If two people are named as account holders, then both will be equally responsible for this debt.

However, not all states subscribe to common law. Some states, including Washington, are community property states. That means debt that accrued after a couple was married, including credit card debt, can be considered the shared responsibility of both spouses.

How to address shared credit card debt 

Even if the court agrees that both you and your ex are equally responsible for the debt that is in your name, your credit card company might not see it the same way. In this case, you have one of two options on how to handle this shared debt:

  • Ask to be removed from the account - Keep in mind most creditors will be unwilling to remove your name from the account. This is usually true even with a document from the court stating that your ex is responsible for some or all of the debt.
  • Transfer debt to another account - You can also request that some or all of the credit card debt be transferred to a new account in your ex-spouse’s name.

If your creditors are not willing to take the above steps, make sure your divorce decree explicitly states who is responsible for what. You can also include clauses that allow for litigation in the event your ex does not pay his or her share. In this case, you would still be responsible for paying any outstanding debt, but you could pursue your ex in court to recoup that money.