Is a Spouse Responsible for Credit Card Debt?

Kristin Peters
Expert Contributor
Last Updated:
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Many Americans wonder: Is a spouse responsible for credit card debt? You may be worried you’ll be held liable for your spouse’s irresponsible spending habits during your marriage, even in the event of his or her death or a divorce. Or perhaps you’re planning for the future, concerned about the challenges your spouse will face if something happens to you. Will they be saddled with your credit card debt if you pass away, lose your job, or otherwise can’t afford to pay it?

Unfortunately, the answer is somewhat complicated. Whether a person is responsible for his or her spouse’s credit card debt depends on several factors, including where the person lives and how the account is set up.

If Your State Follows Common Law Rules

Whether and to what extent a spouse is liable for credit card debt depends largely on how your state treats marital property. Most states follow common law rules in the event of debt collection or divorce. Under common law, you are typically only responsible for credit card debt if your name is on the account.

This common-law understanding of marital assets and debts is also known as equitable division. Where community property states generally consider both spouses to have equal, joint ownership of all marital property, equitable division states recognize that a simple 50-50 split is not always fair. Thus, common law states will protect your spouse’s share of any marital assets, as well as the entirety of his or her separate assets, from debts that are in your name, and vice versa.

Is a Spouse Responsible for Credit Card Debt?

That means if your spouse has a credit card for which you are neither a joint owner nor a cosigner, creditors can only go after your spouse’s assets. If you have any jointly owned assets, creditors can attempt to collect those as repayment. Funds and assets you can prove belong to you should be protected, but the distinction may not be automatic. Instead, you may have to object to the garnishment after the fact.

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Of course, if a credit card is jointly held, or if you are a cosigner on the account, then both you and your spouse are equally liable for the debt — even in a common law state.

If Your State Follows Community Property Rules

Only nine states follow community property rules: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In these states, all property acquired during a marriage is considered community property, which means both spouses own it equally. The only exceptions are property only one spouse owned before the marriage, property only one spouse received before or during the marriage, and property only one spouse inherited.

All other property is considered community property, including all the money that either spouse earns during the marriage and anything bought with either spouse’s money during the marriage. In addition, separate property can become community property if, for instance, funds from before the marriage are deposited into a jointly held account, or if you add your spouse’s name to a title or account you held before the marriage.

This 50-50 split also applies not only to assets but also to debts. In community property states, it doesn’t matter whose name the debt is in. Both spouses are equally liable for any debts incurred during the marriage. That means a creditor can get a judgment against one spouse and collect against either spouse’s income and any other community property. The only debts not considered community debts are those incurred before the marriage or after your separation or divorce.

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Exceptions to the General Rules

A few exceptions exist to the rules outlined above:

  • Debt assigned to you during divorce: During divorce proceedings, a judge may assign debt to you that would otherwise have been your spouse’s obligation. If you are not the account holder or a cosigner, you are still not contractually obligated to pay off that credit card debt. However, if you fail to do so and the credit card company goes after your ex-spouse for repayment, your ex-spouse can sue you for violating the divorce decree and seek reimbursement.
  • Vehicles, retirement plans, insurance, and homesteads: In most states, vehicles and retirement plans cannot be seized during collections. Insurance and annuities are also generally protected. Some states, such as Florida, even exempt a couple’s primary residence from collections. This is known as a homestead protection or exemption.
  • Tenancy by the entirety: Some states allow a couple to co-own property as a single, separate legal entity. In this situation, known as tenancy by the entirety, neither spouse owns the property as an individual. This means creditors cannot collect against it unless they have a judgment against both spouses. Many states allow tenancy by the entirety for a couple’s primary residence. However, some provide legal protection for other real estate and even other types of assets, depending on the state.

If your state does not allow tenancy by the entirety, you may be able to place your bank accounts and real estate into a tenancy-by-entirety trust in Delaware or Florida to achieve the same protection.

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Handling a Spouse’s Credit Card Debt

Regardless of whether you are technically on the hook for your spouse’s credit card debt, it’s usually in your best interest to help pay off the debt as quickly as possible — especially if you have no plans to divorce. Once your spouse defaults on the card, the debt will be sent to collections, which typically means months of letters and phone calls as creditors attempt to collect. If those efforts fail, creditors may seek relief in court. Even if they only garnish your spouse’s wages, you will be affected by the reduced income.

Educate yourself and your spouse about how to stay ahead of your debt obligations. Adjust your spending habits and stick to a budget. If debt is a recurring problem, consider getting help from Debtors Anonymous.

If you find yourself struggling to resolve your or your spouse’s credit card debt, turn to Solvable. We can connect you with a reputable company that can help you find credit card debt relief through debt settlement, credit counseling, or loan consolidation. For more information and a free consultation, call 855-391-9733.

 

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Kristin Peters
Expert Contributor
Last Updated: