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What Happens to Credit Card Debt In Our Divorce?

Intentionally & Exclusively Focused on Family Law
man with credit card bills

As you settle your divorce, your assets will be divided between you and your spouse in a way that the court deems equitable. Often, if one spouse is granted a higher value item, such as the family home, they may also be granted more of the shared debt. Any debt accumulated during the marriage will be divided equitably between the couple, including credit card debt. Our Sherwood, Johnson & Poles asset division attorneys explain what happens to your credit card debt when you divorce.

Division of Debt By the Courts

When divorcing, the courts will total your assets and assign a value to each asset for the division process. This will include your tangible property such as your home and intangible assets, such as investments, retirement accounts, and debt. At the end of the division of assets process, you and your spouse will both receive lists with the assets you will receive and if you accumulated credit card debt, it will be included on one or even both lists.

Creating a Schedule to Paying off Debt

After the debt is assigned, you will need to create a schedule to pay off that debt as quickly as possible. Since all joint accounts and credit cards must be closed following your divorce, you will need to pay off all of your debt before you can close this joint credit card.

As you begin paying off your assigned debt, you should make sure to not add any additional debt to the balance of the card. To help you through this process, you should hide your credit card or keep it in a safe place where no one will touch or use it. You should also remove that credit card’s payment information from any of your virtual keychains and remove that credit card from any autopay or online payment accounts you may have.

When removing all automatic payments and instances in which additional debt can be added to the card, you should also ask your former spouse to do the same. With both parties removing automatic payments and other ways to use the card, you can be sure that no additional credit card use can be achieved.

Closing the Credit Accounts

After all of your debt is paid off and the balance on your account is $0, then you will need to call your creditor, also known as the credit card company, and request the closure of your account.

Inform your former spouse about the paid-off balance and the closure of the account, as it may affect their credit utilization ratio if they are a joint owner or authorized user of the account. You should also request that your spouse delete all auto payments with the account if not already done and they destroy the physical credit card.

Monitoring Your Credit Score

While your credit score may not be affected by the credit card closure, your credit utilization ratio may changed and could affect your score in later months. During the payment process of your credit cards, you should keep an eye on your credit score, which may be impacted by late or missed payments. If you are an authorized user or joint owner of a credit card your former spouse is responsible for paying, you may be affected by their delinquency of payments.

Sherwood, Johnson & Poles Division of Property Attorneys

When dividing assets, it is important to set goals regarding your joint banking and credit accounts, especially if debt is involved. Our asset division attorneys can help you create a plan to pay off your debt and financially prepare for the next chapter of your life as your divorce finalizes.

Do you have credit card debt and are considering a divorce? Schedule a consultation with our asset division attorneys to learn what can happen to your debt as you divorce by calling us at (888) 224-1218 or contacting us online.