Examining credit card debt and divorce

It’s an unfortunate scenario that plays out all the time: one spouse secretly accrues massive credit card debt without telling the other spouse either prior to their separation or during the course of divorce proceedings.

Of course, the question anybody has when this happens to them is whether he or she is responsible for this clandestine credit card debt.

According to legal experts, people who live in community property states like Texas should realize that both spouses remain responsible for any jointly held debt, meaning creditors are indeed free to come after either of you or your fiscally irresponsible spouse.

For those unfamiliar with the term community property, it means that generally any property or debt obtained by the spouses during the course of the marriage is treated as belonging to both of them, while any property or debt obtained by the spouses prior to their marriage remains separate.

Experts also point out that even if the presiding judge takes the credit card expenditures into consideration and ultimately orders your former spouse to pay off this debt in the divorce decree, this is still not total protection from creditors.

That’s because while the divorce decree can order the spouse to pay off the credit card debt, it still does not trump contracts made with outside parties, such as credit card agreements or loan agreements.

Experts suggest that those people who find themselves in these scenarios may want to consider taking steps to ensure that credit card debt is completely paid off as part of the ultimate divorce settlement.

Furthermore, they advise separated spouses who are not on good terms to strongly consider calling the credit card company to ask about the possibility of removing themselves from any jointly held accounts. While this step will likely not absolve them of responsibility for jointly held debts acquired prior to the divorce, it can help protect them in the event their former spouse suddenly starts spending recklessly.

Stay tuned for more from our Ft. Worth family law blog …

To learn more about dissolution of marriage or other family law issues, contact an skilled legal professional.

This post is for informational purposes only and is not to be construed as legal or financial advice.

Source: Fox Business, “Is wife liable for ex’s credit card debt?,” Sally Herigstad, May 7, 2013