It is true that marriages are made in heaven. But everything falls flat on their butt once a marriage hits the rocks. Every bit of reconciliation fails and divorce seems to be the only way out. If everything – both financial and other aspects - is settled before parting ways, then we can say - all is well that ends well. But if the separation is not so amicable and there is some sourness left somewhere in terms of an unsettled financial debt, things can turn both ugly and complex.
One such difficult situation arises when one of the partners incur a credit card debt, and the credit card debt after divorce assumes the form of a Damocles sword in the form of collection people, constantly nagging either of the ex-spouses to settle the due. The situation is a bit tricky here because whether the person who incurred the debt or the other ex-spouse has the real responsibility of making the payment is still not defined clearly by the law. The situation gets more complex when it comes to joint accounts. But let us see the credit card debt after divorce now.
Credit Card debt after divorce – mostly in joint credit cards – is generally seen by the creditors as the joint responsibility of the couple. Actually the spouse who didn’t incur the amount is not liable to pay, but the credit card company may seek payment from both the parties as they care only about the money due to them. What settlement had been reached after divorce is of little interest to these people.
One may feel that closing out credit card accounts (joint) is a solution to all these problems. If you have a responsible spouse, well this will work. But the fact is that the account does not cancel itself until somebody makes the payment. Also, after divorce, it is legally not practical to divide the debts. Hence these are some practical solution, from best to worst.
- Sell any joint asset (say, home) and pay the debt and close the account. It is a classic example of killing two birds with a stone.
- Separate credit cards can be a better option in such a situation. After applying, get the dues transferred into individual cards, divided according to your own logic or the way you spent.
- In this regard, if one of the spouses is not qualified to get a card, get one of the relatives to cosign the card before transferring the share of balance.
But, rather than being through this ordeal, the best option is to get yourself everything settled before divorce. It is always a pain to go behind all these joint issues when you are about to start a new life. Take Care!