Most of us use credit cards every day. Gas, coffee and groceries are but a few of the common uses in this modern world. What happens to credit card debt in divorce?
The law considers credit card debt to be an obligation of the marital estate. If one party always used credit cards to buy makeup and the other used credit cards to pay greens’ fees when golfing, this is how the couple lived. It was their marital lifestyle. Debt of this nature is typically divided no matter which spouse incurred the obligation.
If one party uses a credit card in a manner inconsistent with marital norms, the changes can be scrutinized. Oftentimes people separate and one party sets up a new home with attending expenses; these new expenses are typically not divided.
As a rule, credit card debt existing on the date the divorce is filed with the court is subject to division. And the division is not always equal. The ability to pay, income, and other considerations go into deciding how much each spouse pays. The parties can also trade assets and debts or even liquidate assets to pay off debt. It is very common to pay off the debts when the home is sold or refinanced.
Another way to manage debt is to transfer balances to interest-free cards. Many of us receive solicitations each month to sign up for new cards with interest-free offers.
Many parties also contact the credit card companies and can reduce the amount owed. Be careful as this may impact your credit score.
