Credit card debt and divorce are very difficult, stressful situations just by themselves, but when they are joined together, it can be even more difficult and stressful. What happens to joint credit card debt once a divorce is finalized? Who is responsible for paying off the debt?

Decide It in Court

In most cases, joint credit card debt is discussed and agreed upon in a divorce decree before the case goes to court. The two parties agree upon which person is responsible for paying the outstanding debt, or they’ll agree upon how to split the debt evenly. Sounds simple, right? Unfortunately, credit card companies don’t care what you agree to in court; they just want their money.

A Legal Obligation

Let’s suppose that a divorce decree states that the ex-husband is responsible for all outstanding credit card debt. However, he fails to make payments on time. What happens then? In such a case, the creditor will contact the ex-wife regarding the credit card debt divorce and require that she pays the full amount (plus fees and interest). The ex-wife could then go back to court and enforce the initial decree stating that the ex-husband is solely responsible for all credit card debt; however, this is a costly and time-consuming process in and of itself. The longer the debt goes unresolved, the more accumulated mutual debt they incur.

Late or no credit card payments also affect the credit scores of both parties, even after a divorce. This is because creditors see joint credit card debt as a legal obligation for both parties, regardless of their current marital status.

Ways to Avoid Credit Card Debt at Divorce

There are several great ways to avoid credit card debt before it is too late.

Step 1 – Review your credit report from the three credit reporting agencies, Equifax, Experian, and Transunion. You can do this quickly and easily online. By checking your credit report, you can review all outstanding individual and joint debt before finalizing the divorce.

Step 2 – Now that you have a solid overview of your financial standing, try to pay off all credit card debt before finalizing the divorce. Many couples do this by selling joint assets.

Step 3 – While you are still married, establish credit in your own name. You can easily do this by opening your own, new credit card account.

Step 4 – After the divorce, cancel all joint credit card accounts so that no more mutual debt can be acquired.