Credit Card Debt Distribution in Morris County Divorce Cases
Serving Clients in towns across New Jersey and Morris County, including Madison, East Hanover, Morristown, Randolph, and Florham Park.
Marriage can be difficult in the best of circumstances and getting a divorce is inevitably more difficult, as it brings all of the negative issues to the forefront in a public way. If you or your spouse has filed for divorce, or plan to, you will have to fill out what is known as a “case information statement” which lists all of your assets, debts, and revolving charges.
For many, revolving charges include credit card debt that is listed in your name alone, or jointly with your spouse. Often, those divorcing in New Jersey ask whether the credit card debt is the responsibility of both parties to repay or if it belongs solely to the person that charged the debt. There is not always a simple answer, but generally, marital debt acquired during the marriage is the responsibility of both parties. Marital debt refers to debt that would not have occurred but for the benefit of the family.
Divorce is already a heavy burden to bear; the financial situation adds even more tension to the already fragmented relationship. Both are critical issues you need to address the better way available. Contact our firm today to discuss your personal needs and situation, in a comprehensive and confidential case assessment. Call us today at 973-710-4366.
Division of Marital Debt in Divorce
As noted above, any debt that is incurred as a result of being married, or during the course of the marriage, is a debt owed by both parties. For example, home repairs, mortgage payments, grocery bills, utility payments, medical bills, household expenses, tuition payments, and childcare costs are all marital expenses. Of course, we all charge non-essentials on our credit cards but the amount owed is still the responsibility of both parties, particularly when the card is in the name of both parties.
Credit card companies have legitimate expectations that anyone who borrows money to purchase items will pay them back as promised. Therefore, the companies have will have enforceable claims against you and your spouse for any repayment. Simply ignoring the fact that the debts exist will not make them go away, regardless of the state of your marriage.
Non-marital debt and Divorce
Notably, there may be exceptions as to what is considered marital debt. For instance, if you discovered that your spouse used the joint credit card to buy his girlfriend (while you were still together) an expensive diamond bracelet, or financed his vacation to Cabo, then this is arguably not a joint debt. In this example, you would have a claim in the divorce that your spouse owes the amount to the credit card company or that perhaps, the debt should be offset from another item. This does not mean, however, that you and your spouse do not need to repay the credit card company if the card is in both of your names. The credit card company will not care what the money was used for but they will instead look at what amount was owed, and whether both of your names are on the account as the responsible parties for the debt.
Additionally, if you or your spouse continued to charge on the account after the date of separation, it can be argued that the amount charged is not marital debt and the person who charged the amount should be responsible. Again, this does not mean that the credit card company cannot go after you if the card is in both of your names. It is wise to cancel the joint card once you know divorce or separation is imminent to limit the amount of eventual debt owed to credit card companies.
Credit cards not jointly held by both parties
Not all married people have credit cards in both of their names. In today’s modern world, people get married at all different ages, but more often than not, the parties are somewhat older and more established. Being more mature or older means that the parties have credit cards already listed in their names before they are even married and this carries through into the marriage. It is not unusual to have cards without your spouse’s name on them but you still use them for household and marital expenses. The credit card company can only go after whoever is listed as an account holder. If your spouse is not on the card, the credit card company cannot sue him. However, your attorney may argue to the court that the debt is a marital debt and the responsibility of both parties, not simply yours.
Credit card debt is something that can be settled during the divorce through an agreement. The debt should not be ignored to the point where it impacts your credit rating. Damage to your credit can impact other areas of your life such as housing, mortgages, interest rates and future loans. You may not be able to obtain new housing with a poor credit rating and it is therefore imperative that you put yourself in the best financial position possible.
Contact our Morris County Divorce Attorneys Today
Our New Jersey divorce lawyers are passionate when it comes to representing families going through divorce or separation. At Jacobs Berger, LLC, each of our Family Law attorneys works tirelessly to create the most amicable and equitable path to marital dissolution and reach satisfactory financial agreements. We have the ability to handle all aspects of your divorce. If you are getting a divorce in New Jersey, you should seek advice on credit card debt and what can be done to protect your financial future during the divorce process. Contact our office today at (973) 710-4366to schedule a consultation or contact us online.