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Who's responsible for credit card debt after a divorce?

Francine L. Huff
LoanBiz Columnist

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Divorces can leave both spouses--and their children--in financial ruin. That's why it's important for people to understand exactly what their financial responsibilities will be if they decide to split up.

Credit Cards Belong to Whom?

Individual credit card accounts are the responsibility of the person who opened them, whether they are married or not. However, spouses in community property states may be responsible for all debts accrued during the marriage, regardless of whose account it "really" is. So if one spouse can't or won't pay, creditors expect the other to pony up.

Joint accounts are always the responsibility of both spouses. Credit card companies don't want the details of a person's messy divorce; they just want to get paid. So even if one spouse doesn't work, he or she is equally liable for making sure those debts get paid. After the divorce, the court may place the responsibility on one former spouse to make payments on a joint account. However, creditors don't have to honor the provisions of a divorce decree--and if one former spouse doesn't pay, the other is considered fair game.

Close Joint Accounts

People who are already in divorce proceedings should continue to make payments to their credit card companies to avoid any problems. Any accounts they don't need should be closed. They also can contact their creditors to ask if joint accounts can be converted into individual ones. However, credit card companies are not obligated to convert accounts and may even require individuals to reapply for credit on their own. Credit card companies can freeze accounts for people who are in divorce proceedings until it's determined who is liable for the debt. One or both spouses may still be required to make minimum payments until the divorce is finalized.

Review Credit Reports

Divorcing couples should get copies of their credit reports from all three credit bureaus to make sure they know exactly what needs to be addressed. Both individuals should review which accounts are still open and what their balances are. Generally, divorce decrees specify how debts and other financial obligations will be handled, but some details can slip through the cracks. Once a couple has split up, it's important to continue monitoring any joint accounts to make sure new charges aren't being made and bills are being paid on time.

Source:
Federal Trade Commission

About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.

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