Types of Credit Card Liability in Divorce
Joint accounts: Both spouses are equally liable for the entire balance. The divorce decree can assign responsibility, but the creditor can pursue either party. Individual accounts with authorized user: Only the primary cardholder is liable. The authorized user has no legal obligation for the balance. Individual accounts: Only the account holder is liable. In community property states, an individual card used during the marriage may still be treated as community debt.
The first step in any divorce: pull credit reports for both spouses to identify all accounts, balances, and account types. Many spouses are surprised to discover accounts they didn't know about.
Strategies Before Divorce
1. Close all joint credit cards immediately. Contact each issuer and close the account. This prevents new charges even though the existing balance remains joint. 2. Remove authorized users. If you're the primary cardholder, remove your spouse as an authorized user to prevent new charges. 3. Pay down joint balances. Use marital assets to pay off joint credit cards before the divorce is finalized. 4. Transfer balances to individual cards. Each spouse can transfer their share of joint balances to individual cards, eliminating joint liability.
These steps are easier when the divorce is amicable. In contentious divorces, the court may issue orders preventing either party from incurring new debt or dissipating marital assets. Ask your attorney about a temporary restraining order on finances.
After Divorce: When Your Ex Doesn't Pay
The most common post-divorce credit card nightmare: your ex was assigned a joint credit card in the divorce, they stop paying, and the creditor puts it on your credit report and calls you. You've already learned about this problem.
Your best options: pay the debt yourself and pursue your ex for reimbursement, negotiate a settlement with the creditor for less than the full balance, or file bankruptcy to eliminate your liability. If your credit is already damaged by the ex's nonpayment, bankruptcy may actually help by giving you a clean start to rebuild.
Frequently Asked Questions
Am I liable for my spouse's individual credit card?
If your name is not on the account and you were never an authorized user, generally no in equitable distribution states. In community property states, you may share liability for individual debts incurred during the marriage for community purposes. Check your state's specific rules.
What if my spouse ran up secret credit card debt?
In equitable distribution states, the court may assign secret debt to the spouse who incurred it. In community property states, community property may still be liable for the debt. Document that you had no knowledge and didn't benefit from the spending.
Can I be held liable as a former authorized user?
No. Authorized users are not liable for credit card debt. Only account holders and joint account holders have legal liability. If a creditor contacts you as a former authorized user, inform them of your status and dispute any credit report entries.
Check your bankruptcy discharge eligibility with our free screening tool.
Free Discharge Screener