How Is Credit Card Debt Handled in Divorce?

Sorting through shared finances is an essential yet tedious part of the divorce process. The financial side of a divorce involves assets, accounts, property, cars, alimony and child support, and more. Credit card debt can further complicate this already difficult process.

New Jersey is a common law state, which means that you will be responsible for all debt that is under your name with you as a sole owner or joint owner with your spouse. This contrasts with states that follow community law, which states that any debt incurred after the date of marriage would make both parties equally liable for repaying those debts.

In New Jersey, if you have a joint credit card account with your spouse, the debt is shared between both parties, meaning both individuals are responsible for paying all debts to the creditors. A creditor would see the debt the same way regardless of marital status.

If you are the sole owner of your credit but your spouse is an authorized user, this may complicate the situation. An authorized user is someone who is allowed to use your credit card with your permission. The first step is to remove your spouse as an authorized user to prevent any further credit confusion from that point going forward. You can do this by calling your credit card company and asking to remove an authorized user, which may require you to provide an authorized user’s information such as a social security number.

In this case, a judge can make a court order that states that your spouse must pay debts that they incurred on an account that is owned by you. This, in turn, makes them legally liable for that debt but does not absolve you of your liability to the creditor. It is still debt under your name, so this does have the potential to create a tough situation if your spouse does not pay the debt. This would be a critical topic to discuss with your divorce lawyer.

Getting a divorce can be a messy process without the help of an experienced divorce lawyer. The financial aspect of any divorce can add a lot of stress in addition to all the other tasks that must be sorted in a divorce, especially if it involves the division of debt. A knowledgeable New Jersey divorce lawyer could work to ensure that you have the information you need to organize your debt between you and your spouse properly. Contact Moskowitz Law Group, LLC for your free case evaluation today.