CREDIT CARD DEBT and DIVORCE
Credit Card Debt and Divorce: Who is Responsible?
Learn the two basic rules of debt responsibility in divorce cases: if the debt was acquired during the marriage, both spouses are responsible; and, if the debt is connected to an asset, the spouse who receives the asset is responsible for the debt. Understand the implications of debt disputes in divorce and how they can lead to more debt. Know what to do if you are faced with credit card fraud during a divorce.
When it comes to credit card debt and divorce, there are two basic rules to remember: if the debt was acquired during the marriage, both spouses are responsible; and, if the debt is connected to an asset, the spouse who receives the asset is responsible for the debt.
The credit card debt is not my fault.
Throughout the divorce, my poor aunt would violently assail my poor uncle regarding the credit card debt. She discovered that, over the years, at least a dozen credit cards had been opened in her name. Naturally, she testified that she never had a card, use of the card, made a payment or benefited from the use of any of these cards.
Divorce Stress and credit card debt.
Ironically, my poor uncle broke down and cried in anger and disgust while testifying about these credit cards. On closer examination, the credit cards had been inactive for years. In fact, the statute of limitations had run and the lenders had no right to pursue her for these debts.
Debt is a proxy for anger in divorce.
My poor aunt was off the hook monetarily. For the Family Court Judge, these debts were a non-issue. However, my poor aunt, viewed these debts were a source of anger and betrayal greater than any other. On the contrary, for my poor uncle, these debts were just the cost of doing business. If he could not get a new card opened in his own name, he could forge his wife’s name and keep on rocking.
Divorce debt and mania.
Eventually, these credit cards were mailed to the PO Box to which only my poor uncle had access. Eventually my poor uncle stopped paying the PO Box rent and the mail was shifted back to the marital home. That’s how my poor aunt discovered all of these credit cards in her name in default and went crazy.
Debt disputes cause more debt.
When I spoke to my poor aunt and my poor uncle about their credit card debt, I told them it was nothing to fight about. In fact, fighting over $150,000 in credit card debt only results in the accumulation of more debt. Fight that relieves one spouse of some debt and shifts the debt to another spouse usually comes after the expenditure of enormous amounts of time and money in Family Court.
Debt, divorce and fraud.
I told them family court judges know a few things about credit card debts. Of course, the larger the debts, the worse the family financial picture. Ordering one person to pay debts is often futile. In any case, credit card debt arises from a contract between the person that ordered the card and the lender. Nothing the judge says will impact that contract. Claiming “fraud” to the credit card lenders years after the account was opened by a spouse rings hollow with the credit card fraud departments.
Who gets the credit card debt in divorce?
It depends. Debts incurred during marriage are marital. Debts must be addressed in divorce. Assume (2) basic rules:
- If the debt was acquired during the marriage – assume you will be responsible for some of it.
- Debt connected to an asset goes with the asset. Furniture bought on a credit card – whoever gets the furniture – gets the debt too!
Adapted from RICH UNCLE DIVORCE, A Parable authored by Jeff J. Horn, Esquire
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