How is credit card debt split in divorce, will largely depend on the emotional state of the two partners.
All divorces have the ‘spilt down the middle’ approach initially. The splitting of credit card debt is like any other “asset/liability” in that respect. If both parties can have a level head and just think more of the final outcome, rather than the route right now, then each spouse should be as ‘well off’ as can be. If on the other hand there are surprise spendings, remortgaging or any other such items on the agenda it will be more difficult for the other party to keep a level head! “CCCS sometimes has to give clients a second appointment in a couple of days so they can process some of their anger before trying to concentrate on the facts again. “Nevertheless one should recall that the outcome of the split of credit card debt during the divorce is to leave the marriage as free feeling financially as when we got into it. I read during my research that there are cases where one of the spouses gets remarried with a bad credit rating together with their ex-marriage debts, imagine that – the love of your life not only has an ex but an ex where the split of the credit card debt from the divorce has money going out of your account that you pay for, and you don’t even know this person! Spare yourself and the other spouse this nightmare and think ahead – calmly and get rid of all the debts together and pay off each his own share.
The quicker you are free of the split of the credit card debt the quicker your new life can begin.
Let us now concentrate on the unusual sides to the spit of credit card debt during a divorce that you may possibly not know.
The split during of the credit card debts during the divorce : How
There are some details that may have illuded you though – So what will be spit will be :
- Credit card debt
- Medical Expenses
And in America the added two types of debts:
- Living expenses – money you pay mortgage/rent, groceries, utilities, cell phones…
- Communal property – new gym equipment, new TV, Fridge / freezer…
This can be even more of a tangled split of the credit card debts during the divorce if you had debt on the credit cards before the marriage and if you have both types of debt on the same card.
For the communal property – depending in which State you live in …
Community property states that if the couple bought an item for $25,000 during the marriage – say with $20,000 still to owed – then what is left to pay on the item is split in half, so each owe $10,000. But if one of the partners had secretly bought for $25,000 an item on their name only, in community property state the credit card debt during the divorce is 50:50 so they both owe $10,000.There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska is an opt-in community property state that gives both parties the option to make their property community property, (2016) To help protect yourself if you live in these states, full financial disclosure is important during settlement negotiations. You should make a detailed list of all account numbers, amounts owed, and who is responsible for each of the debts. Ordering a copy of your credit report can help you get started. In the other states the debt is likely to be done through ‘equitable distribution’ in which an attorney and a judge determine what each spouse owes. So it could well be that in the above example the other partner would not owe anything and the one that bought would be liable for the totality $20,000. But not to worry for “Courts are fair,” says Naschin, the attorney who has handled a lot of celebrity divorces. Overall, he says, when it comes to deciding whose debt is whose, “most courts aren’t jaded and want to do the right thing. And most courts don’t want to be reversed in an appeal.”
A. The Credit Cards Debts…
- To stop the expenses coming out of the joint account, some states need you to be legally separated, others just living apart – so get new cards as soon as you separate or move out, for expenses to now cease.
- Here again the split of the debt and closing your joint accounts seems to be the best advice to not have financial trouble down the road. It is in the best interest of both parties to pay off the debt immediately. Should this not be possible then write to the creditors notifying them of your impending divorce, asking them to close the accounts, cancel the cards and request a current statement so you can be aware of your joint liability. Establish a credit card in your own name as soon as possible! Should there be any liquid assets in the joint savings, or accounts this should be used first to pay off as many of the debts as possible.
- What if the debt is on my card for the other’s expenses?
To use your credit ratings and lower rates for expenses, even if they’re not yours per se, during marriage is only natural, and
whilst this is a common trait to want to use the better credit score for lower repayments, you can not have your cake and eat it during the divorce split procedures! The credit card has a name on it and that person is liable. The credit card companies won’t permit you to just ‘switch’ this credit to the other spouses card. Should you both be in agreement of that the debt belongs to that spouse then the best way would be for them to get a new credit card and do a “balance transfer” from the old credit card to the new one. Or you may want to do a small claims in court, depending on the amount for there is a limit.
- What if my spouse has a double of my credit card?
Again you are solely responsible for that credit.
- How to protect yourself if your ex does not pay…
In the split of the credit card debts during the divorce settlement agreement there must be an indemnity clause.
Should this be worded correctly it will allow you to take your ex back to court so consult well with your lawyer on this matter before signing any papers.
- Here’s where things get a little complicated. The division of a mortgage isn’t as straightforward as credit card debt during divorce. Because a mortgage is typically such a monumental expense, most states offer a variety of options for dealing with the situation. Ownership of the mortgage will typically be awarded to someone who makes significantly more than their former spouse or has been awarded full custody of the former couple’s children. In either of these situations, one party will be required to buy out the other’s equity in the house. Of course, the couple can decide to bypass all of these decisions and simply sell the home if they so choose.
- Care though :
Some marital attorneys may ask you to have your name removed from the title of a marital home or car. DO NOT DO THIS if there is any outstanding loan and your name is on the loan agreement. First make sure that the financial agreement is in the other spouse’s name alone.
C. Medical Expenses
Medical expenses comes under the same laws as the Community Property States Laws above.
So the final split?
As mentioned, while extenuating circumstances can come into play, financially speaking, credit card and other divorce debts are a lot like marriage vows. Whether or not it was spoken during your wedding ceremony, the implicit vow “for richer or poorer” meant that you agreed to share in whatever debts you and your spouse accumulated during the course of your marriage.
Let us not forget though that to be rid of as much of the debt as possible, before separation even, is the best option.
I am dedicated to bring you value, techniques, tools and mentor you to have a delightfully divorced life. Divorce is final, and even though my own story is probably different to yours we as mothers first and foremost have to bounce back. I suffered domestic abuse, and although it takes two to tango, I fell really low and deep. But you can see videos about that for now I am out and about applying these and I have found the way to freedom - for me. I am a digital strategist extraordinaire, quite visionary really and this gives me vomph to my step, bounces me out of bed so as to serve you all better. I love my digital life style and would love for you to experience the community, camaraderie, and cutting edge markting techniques. The one thing I found very helpful about the community is that it allows me to be me, in all my authenticity and dynamic, where at the worst of my life, here I could just be. No pretence not a mask to put on just be. The fact that we help each other means that there were always times I felt good about myself too. So apart from all these tools that I have gained in the process of getting myself aware of the situation I was in - domestic violence - was probably the single most important factor. But you too have got there if you are reading this, so now lets move you forwards and onwards. Look, I would love for you to meet my mentors, or perhaps you would prefer an explanation of the system via a webinar? Jsut to tell you that should you opt in there will be
7 training videos on their way to help you understand better, just one a day, where Stuart talks you through it, a couple with Jay too.