Couples tend to share just about everything when they get married, including their checking accounts and credit cards. Partially as a result of this reality, if they decide to divorce, they will have to split not only their resources but also their financial obligations.
Credit card debt can be a real challenge in modern North Dakota divorces. Spouses often feel very strongly about the fair or appropriate way to divide such obligations, and there is some ongoing risk for one spouse to harm the credit of the other under certain circumstances, even while a divorce is pending. What do couples need to know when discussing the division of their credit card debt during a divorce?
Most debts are marital property
With the exception of credit card balances someone already carried before they got married, pretty much all credit card debt owed by a marital couple will be part of their marital estate and possibly subject to equitable division rules in their divorce proceedings. Unless the debt is the result of dissipation or wasteful spending, it may be divisible. People either negotiate how to divide those obligations or have a judge handle asset division on their behalf.
Each spouse could take responsibility for certain credit cards or a portion of the debt as a reflection of personal earning potential. Sometimes, paying off those debts will be part of a bigger property division settlement that might include refinancing a mortgage as well. Someone who receives more marital property might also have to pay more marital debt. Any solution that the courts determine is equitable or the spouses agree on in writing can potentially work.
There is some risk in the process until all of the debts are paid in full, as one spouse defaulting on marital obligations could lead to the other facing collection activity despite the order from the family court. Therefore, people have to consider the possibility of their spouse intentionally defaulting or filing for bankruptcy when they negotiate arrangements related to debt or request specific terms from a judge presiding over their divorce.
Being aware of the kinds of assets and financial responsibilities that can complicate property division proceedings during a divorce can make it easier for people to better protect themselves at the negotiating table and/or in family court.