Divorce can bring up many financial concerns, especially with regards to bank card debt.
One of the vital pressing questions is whether or not you’ll be accountable for your ex-spouse’s bank card debt after the wedding ends. The short answer is that it is determined by the state you reside in, whose name is on the account and whether the debt was incurred before or throughout the marriage.
In this text, we’ll discuss these aspects and a few steps you may take to guard your credit during a divorce.
Am I Responsible For My Spouse’s Credit Card Debt In A Divorce?
Whether or not you are accountable for your spouse’s bank card debt in a divorce is determined by several aspects. Below we’ll take a better have a look at them to make it easier to determine who pays bank card debt in a divorce.
Common Law vs Community Property States
Relating to bank card debt, most states follow what’s referred to as common law property rules. Which means, if the debt is in your name, it’s your sole responsibility to pay it.
Nevertheless, there are nine states that follow community law guidelines: Arizona, California, Idaho, Louisiana, Nevada, Latest Mexico, Texas, Washington and Wisconsin. Here, each spouses are accountable for all bank card debt acquired during their marriage, regardless of whose name is on the account.
Keep in mind that community property states might need some exceptions with regards to dividing marital debt. As an example, in case your spouse used a bank card to fund a gambling addiction, they created debt that only benefited them and never the household.
Individual vs Joint Credit Card Accounts
In a divorce, you are normally only accountable for credit accounts in your name. Nevertheless, note that you simply’re also legally answerable for joint and co-signed accounts where your name is on the bank card agreement.
A divorce decree doesn’t replace the agreement between you and your creditors. So, if the court assigns debt from a joint or co-signed account to your former spouse, a bank card company or other creditor can still try to gather payments from you in case your ex stops paying it — and this might impact your payment history and credit rating.
Still, your divorce settlement should include a division of property that outlines who’s accountable for which debts. This document doesn’t stop a creditor from looking for payment from you, but it surely lets you sue your ex in the event that they don’t pay a debt assigned to them by the court.
How To Protect Your Credit During a Divorce
There are several steps you may take to protect your credit during a divorce:
- Repay your joint bank cards and stop using them to avoid accumulating more debt.
- Consider closing joint accounts entirely. This will temporarily lower your credit rating, but it is going to help be sure that neither of you may incur more charges and the danger of missed payments and other credit-related problems.
- Attempt to refinance existing co-signed bank cards in order that either you or your spouse are solely accountable for them.
- In case your spouse is a licensed user in your bank cards, remove them to avoid any unauthorized transactions.
- Changing account numbers in your remaining accounts could be idea, especially in case you ever store your payment information in your ex’s computer or phone.
- Check your credit reports periodically and search for accounts which may’ve been opened in your name without your consent.
- Freezing your credit report may be worthwhile since it may possibly stop other people from opening credit accounts using your personal information.
- Keep track of spending activity so that you would be able to reveal who’s accountable for certain debts during divorce proceedings.
- Consider looking for advice from a credit counselor or a financial advisor to assist manage your personal funds during and after the divorce agreement.
Who’s accountable for bank card debt in a divorce? | FAQs
Are you able to sue your spouse for not paying bills?
Yes, divorcing couples can sue their spouse for not paying bills, especially if the court ordered them to accomplish that during or after a divorce.
How can divorce impact my credit rating?
Divorce doesn’t directly impact your credit rating, but it may possibly result in financial complications that do. As an example, your rating could drop in case your ex stops paying or maxes out joint accounts. Moreover, you’ll have to tackle additional financial responsibilities or lose access to shared income after a divorce, which might increase your debt load and lower your rating.
If you get married, do you share debt?
You do not robotically share debt whenever you get married, but it’s possible you’ll develop into accountable for debts incurred throughout the marriage depending on the state you reside in. In community property states, most debts acquired throughout the marriage are considered community debt, even when just one spouse is the account holder. In common law states, you are typically only accountable for debts in your name and joint or co-signed accounts or loans.