Dividing Credit Card Debt in Divorce: Have a Plan

As you inch closer and closer to the divorce process, you’ll spend a greater amount of time focused on property and debt division. Through the creation of a property division and debt checklist, you’ll have a clear understanding of where things stand and what you’re up against in the near future.

Credit card debt can be a sticking point, as neither party wants to get stuck paying out more money than they should. Here are some tips you can follow when dealing with the division of credit card debt in divorce:

  • Have a plan for leaving your marriage without joint debt: If you’re able to accomplish this, you don’t have to worry about having this tie to your ex-spouse after your divorce is finalized.
  • Pay off joint credit card debt together: There are many ways of doing so, such as by using money from a joint savings account to eliminate the debt. It may not be something you want to do, but, for the sake of a better financial future, it makes sense.
  • Divide the debt: If you don’t have the money or desire to pay off the debt in full, each individual can transfer half the debt onto a credit card in his or her respective name. At this point, you’re responsible for your portion and your ex-spouse is responsible for his or hers.
  • Cancel all joint credit cards with a zero balance: You don’t want to leave one of these hanging out there, as you never know if the other person will use the credit card and leave you on the hook for half the balance.
  • Keep records: If you’re using a joint credit card for any reason, you should keep records of what you purchased. It’s good practice to stop using joint accounts the second you decide to divorce.
  • Consider bankruptcy: If you’re still married and your financial situation is a mess, you may be able to use bankruptcy to your advantage. This can help eliminate your joint debt, thus giving you a fresh start in the future.

The key to successfully dividing credit card debt in divorce is to have a plan. When you know what you should and shouldn’t be doing, you’re less likely to make a mistake.

In the event that your ex-spouse doesn’t want to cooperate with respect to property and debt division, it may be time for the court to step in.

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