One of the most commonly asked questions of our Morris County divorce attorneys is, “What happens to my credit card debt during divorce?” Considering the number of Americans that use debt to pay for a wide variety of common services and expenses, it is understandable why this would be on the top of anyone’s mind.
While the easy answer to this question is that all marital assets and debt are subject to equitable distribution during divorce, when it comes to credit card debt there are a few important things to keep in mind.
Credit Card Companies are Not Bound by Court Orders, Madison Debt and Divorce Attorneys
One of the most important things to understand when dividing debt during divorce is that credit card companies are not bound by divorce court orders. This means that, although your agreement reflecting the division of assets may state that one spouse gets a certain asset in exchange for the other spouse assuming responsibility for some amount of debt, as long as that debt was originally incurred under the joint names of the spouses, the credit card company can still hold both spouses responsible for that debt regardless of whatever settlement was reached between the parties related to the responsibility for that debt.
For this reason, it is highly recommended that you and your spouse make every effort possible towards paying off any jointly incurred debts before your divorce is finalized. If there is any jointly held debt remaining after your divorce, the credit card company is free to go after either you or your former spouse when it comes to seeking repayment. This means your credit score could be negatively impacted even though it was agreed your former spouse would be the one to pay the debt off.
Marital Contributions and Asset Division, Hanover Equitable Distribution Lawyers
The second thing to keep in mind when it comes to debt and your divorce is that certain debts, while in the name of only one of the parties, may still be considered a marital debt. This often occurs when the debt was incurred for the purpose of paying for expenses related to the family.
This means that all debts, both jointly held and separately held, will need to be examined closely, and a determination will need to be made if any of the individually held debts were in fact taken on in order to help the family. Once it is fully understood which individually held debts are still to be considered marital debt, only then can you begin working towards a resolution of the division of assets and debt.
Contact Our Morris County Credit Card Debt and Divorce Attorneys Today
When you work with Jacobs Berger, not only are you working with experienced and knowledgeable family law attorneys, you are also working with the highly qualified network of financial advisers and mental health professionals we have at our disposal. We understand your divorce requires more than just legal representation in order for this process to be successful for you and your family. As our ultimate goal is to resolve your divorce in a manner which protects the financial security and familial relationships you have already worked so hard to build, we offer more than just legal representation during your divorce.
With extensive experience helping many clients to fairly and effectively resolve their divorces in towns across Morris County, including Madison, Randolph, Hanover, Florham Park, Denville, and Morristown, our family law team is ready to put this experience and our unique approach to conflict resolution to work for you today.
To speak with our attorney team today in a strategic planning session regarding your divorce, your division of the assets within an agreement, or how your debts may affect this agreement, please contact us online, or through our Morristown, NJ office at (973) 710-4366.