What Happens to Credit Card Debt in Divorce?

Kristin Peters
Expert Contributor
Last Updated:
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Financial problems are commonly cited as one of the  top reasons for divorce and for marriage counseling. When problems arise from the irresponsible spending habits of either one spouse or the couple as a whole, credit card debt is often an issue. That leaves many couples wondering what happens to credit debt in divorce.

Before pursuing divorce, it’s wise to understand all the legal and financial repercussions, so you can prepare and protect yourself as well as possible. Start by determining whether you live in a common law or community property state. The answer to that question has a huge impact on how credit card debt is handled during divorce.

What Happens in a Common Law State?

Under common law, you are only held responsible for debt that is in your name or attached to your name in some way. If your spouse has a credit card for which you are neither a cosigner or joint account holder, he or she alone is responsible for that debt. However, you are both responsible for any debt that either of you incurred on a joint account. That includes any charges your spouse, as an authorized user, makes to your credit card.

In a common law state, the judge decides which debts and what portion of each debt each spouse is responsible for. This will be spelled out in the divorce decree or separation agreement. Most states follow common law.

What Happens to Credit Card Debt in Divorce?

What Happens in a Community Property State?

In a community property state, both spouses are equally responsible for all debts incurred during a marriage — regardless of whose name is attached to the debt. That means a credit card company can try to collect from you even if your spouse is the only name on the account. After divorce, all marital debts and assets will be divided between the two spouses. Typically, everything is split 50-50; however, judges in some states have some leeway to make an arrangement that is fairer to both parties, such as a 40-60 split.

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Only nine states follow the community property approach:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

In Alaska, couples can decide whether they would like to apply common law or community property rules.

How Can I Protect My Finances?

If you live in a common law state, the best way to protect yourself is to avoid opening joint accounts. However, it may be too late for that. Most couples aren’t thinking about how to protect themselves at the start of their marriage when everything is going well, so you may have already opened a few joint accounts. In that case, follow these steps:

  1. Pay down the debt. The more debt you can pay off before the divorce, the more smoothly things will go. Having less debt will simplify your finances and make dividing things easier. It will also give you a cleaner slate when you start your new life.
  2. Remove your name from joint accounts. Getting your name removed from a joint or a cosigned account can be difficult, especially if your spouse has limited income. Still, it’s worth calling the credit card company to see if it can remove your name from any joint accounts before your divorce. As long as your name is on the account, you can be held liable for any purchases your spouse makes with it.
  3. Avoid missing any payments. If you can’t make payments during the proceedings, call the credit card company to let it know. You may still be charged fees for late or missed payments, but the card issuer may also work with you to change the payment due date.
  4. Stop using joint accounts. During the divorce, you should also avoid using any joint credit cards. Instead, pay for your purchases with a separate credit card or personal funds.
  5. Secure your accounts. After the divorce is final, you should secure your accounts by changing the passwords, removing your spouse as an authorized user, and having the account numbers changed. These steps will ensure your ex-spouse cannot continue to incur debt you will be liable for.
  6. Look into debt relief options. If you owe more than you can afford to pay after your divorce, review your credit card debt relief options. You may be able to find relief through loan consolidation, debt settlement, and credit counseling.

If you live in a community property state, a prenuptial agreement may help protect your finances in the event of a divorce. Common law and community property rules apply only if you and your spouse cannot come to an agreement on your own. Prenuptial agreements will generally be honored as long as they do not violate state or federal law.

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Are Credit Card Companies Bound by Divorce Decrees?

The short answer is no. A judge in divorce proceedings may decide your spouse is responsible for paying off a certain card, but the credit card companies are not bound by that decision. The judge cannot change the terms of your or your spouse’s contract with the credit card issuer. This discrepancy could leave you in the awkward position of being liable, in the eyes of the credit card issuer, for a debt the court has assigned to your spouse.

How might this play out? Let’s say that during divorce proceedings, the judge determines your spouse should be responsible for paying off the purchases he or she made as an authorized user of your credit card. If your ex-spouse fails to pay off that debt, the credit card company can hold you legally responsible for it. You may end up having to pay off the balance yourself. In that case, you can sue your ex-spouse for violating the divorce decree and seek reimbursement. However, pursuing the case may cost more than it’s worth.

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You should keep this in mind if you’re on the other side of the equation, too. If you don’t pay off a debt assigned to you by the divorce decree, the credit card company may go after your ex-spouse instead. However, by failing to follow the judge’s orders, you open yourself up to lawsuits from your ex-spouse.

If you find yourself struggling to pay off debt that accrued during your marriage, Solvable can help. We’ve reviewed dozens of debt relief companies, so we can help you find the perfect fit for your situation. Call 855-391-9733 for your free, no-obligation consultation.


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Kristin Peters
Expert Contributor
Last Updated: