Posts Tagged ‘credit card debt’
Credit card debt – how to deal with it in divorce?
Since the dawn of earth, we keep saying that marriages are made in heaven, but those marriages falls on their feet when the couple lack understanding between them and ultimately the result is divorce. It is tragedy situation when the family breakdown therefore the adjustment of kids and financial matters will become difficult.
Most part of difficulty arises when you have to separate the things like one house into two, one checking account into two and other bills like credit cards, utilities etc.
If you decided to end your marriage then there are certainly some issues that you need to look into like credit card debt, who is responsible for the debt that had accrued during and after the marriage? When you apply for the credit card, you enter into an agreement with Card Company that you are responsible for the purchases that are made through that card and to pay off all the balances in time.
It is common that when you are ending your marriage, obviously you might be splitting of the assets between two parties then why not splitting debt? Why only one partner has to bear all the debt which incurred for sake of family expenses. In this case it is likely that they include credit card debt also while splitting up their assets because that plays an important role in financial part for an individual. But the splitting of the credit card accounts is not such easy for the card companies and that takes long process and duration when the marriage dissolves.
So in a process of separating many issues need to be examined and deliberated on how to split the credit card debt. In this case, the person who continues to hold the family accounts will become responsible to get those bills and expected to pay them or else best way to handle that debt is to enter into a forced settlement agreement. By the time the marriage dissolution comes to an end the total debt will be calculated and will be divided between the so called partners.
In this case one partner manages the credit cards and the other only pays the set amount. And if the credit cards are used by either partner then it becomes the headache of the card issuer to adjust the amount between the two people.
In other case the card issuer may see the credit card debt as a joint responsibility of the couple but the spouse who had not incurred amount is not responsible to pay the amount. But the credit card companies will not agree to this and seek the payment form both the parties as they only care about the amount getting back.
In this case, two alternative solutions available. One is to sell the joint assets and pay the debt that incurred in the joint account and close the accounts.
Second is to open separate accounts on each of their names and do the balance transfer into their respective accounts and pay off depending on their availability.
These are the solution that a couple have when they are dealing with credit card debt after their divorce.