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How does a divorce settlement affect credit card debt?

Over the course of a marriage, it is not uncommon for a couple to build up credit card debt. Life happens and it can get expensive. Unfortunately, whether you live in Texas or elsewhere if you are pursuing a divorce, credit card debt can be a significant problem.

When getting a divorce, handling debt is not usually a top priority. Most people are more concerned about dividing other property and dealing with child custody and support matters. However, you can't just ignore your financial obligations to your creditors.

Who is responsible for the debt?

If a credit card is on a joint account, the responsibility to pay back the debt belongs to both cardholders. Usually, if credit card debt is all on a single account, the individual named on that account will be legally liable for repayment. However, as Texas is a community property state, all debts incurred during the marriage generally qualify as shared debts.

What are my options for dealing with the debt?

Paying off shared credit card debt with any funds you have on hand is probably the best thing you and your spouse can do before you finalize your divorce. If that is not an option, however, any shared debt should be divided evenly between you and your soon-to-be ex as part of your divorce settlement. It is possible to protect yourself from being liable for your spouse's share of the debt by:

  • Setting a time frame for transferring debt to a single account
  • Naming the person responsible for paying off a specific debt in the divorce agreement
  • Canceling joint accounts

Do not be left with more than your fair share of your marital debt

There is no doubt about it, dealing with credit card debt when your marriage fails to thrive can be a challenge. However, you will want to make sure you don't end up with more than your fair share of the financial obligation. Post-divorce life finances are stressful enough without adding debts that rightfully belong to your former spouse.

If you are going through a divorce, you can seek a fair and balanced division of debt. With the assistance of your legal counsel, it is possible to make the necessary arrangements so that debt is evenly divided and appropriately managed.

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