Credit Card Debt and Divorce
When you look at the almost complete lack of financial training that people receive as teenagers, it should come as no surprise that the majority of marriages that end in divorce do so because people have no idea how to manage their money. It is a phenomena that crosses all socio-economic classes. Married couples that make $500,000 a year tend to fight about money just as much as couples that make $20,000 a year. If you have finally had enough and have decided to file for divorce, there are several things you need to keep in mind when it comes to paying off your credit card debt. Here are a few tips.
First off, don’t think you are getting out of this cheaply. Between lawyer expenses and settlement costs, divorce is very, very costly. It can ruin people financially and that is before the judge rules on who gets what. For many couples that are fighting over money, counseling is usually recommended over divorce only because divorce tends to make things even worse. But if you have reached your wits end, here are a few things you can do to protect yourself.
When you get a divorce decree, the debt of the relationship is usually divided up, many times 50-50. This can be extremely frustrating if one person has been economically responsible, while the other spouse has been racking up huge credit card bills. But regardless of what the divorce decree says, as long as both of your names are on the credit card bills, what happens to those cards affects both of you equally.
Let’s say that your decree declares that your credit card debt be split in half. You have $10,000 in credit card debt, and at first, both parties involved begin to make payments. But eventually, your ex-spouse stops making full payments or their payments are late while yours are right on time. This can and will affect your credit score. Even after you have paid in your $5,000 and met your legal obligation to your divorce decree, if you simply ignore the card from that point on and it goes into collections, your credit score will suffer. Here is what you can do. Make a copy of your divorce decree along with proof that you paid your part of the credit card bill. Send copies of this to your lawyer and to the credit card company and see if they will remove your name from the account entirely. If they do, than it is your ex’s problem. The same goes for any other credit account that you still legally share with your ex once your divorce is final. As long as you meet the legal requirements set down by the judge, you can then ask for your name to be removed and that the remainder of the balance be the other parties responsibility.
If the credit card company is hesitant to help, check with your divorce lawyer about what can be done to help speed the process along. The key here is to remember that as long as your name is on an account, your credit is being affected by it, for better or for worse. Don’t let a financially irresponsible spouse ruin your hard earned credit after you get divorced.