Dealing with credit card debt during a divorce


Divorce is a difficult time for everyone going through it, particularly if there are children and families involved. However, many divorcing couples will have to sort out more than just their joint assets and legal bills when they divorce. They will also have to figure out what to do with their remaining credit card debt.


The Office for National Statistics said in 2008 that it expects that approximately 45% of all UK marriages will end in divorce. And research shows that many of these couples will have a hard time paying for their separations.

According to the National Family Mediation, the average cost of a divorce in the UK is now approximately £14,000 -- enough to send a lot of people further into debt. Add to that prior debt that was incurred before the marriage dissolved and you have a recipe for significant financial distress that can wreak havoc on even the most amicable divorces, say experts. 

Unfortunately, joint credit card debt does not automatically disappear once you divorce. Before you go your separate ways, you will have to resolve how to pay off your remaining credit card balances before you close your joint cards. Otherwise, you could wind up in even worse financial trouble. 

Experts say that if you opened joint credit cards while married, the best case scenario is for both parties to pay 50% of the outstanding balances and cancel all the cards before the separation is completed. However, the amount that you repay can be difficult for couples to agree on, particularly if one spouse spent significantly more on the cards than the other. 

According to a recent article in the Daily Mail, a rising number of divorcing spouses say they're unwilling to shell out for their spouse's spending -- causing many divorcing couples to be "at loggerheads over who should pay back credit card and loan debt." The Daily Mail also reports that it's not uncommon for some spouses to find out that the other party had a secret debt, such as a secret credit card, that the other spouse is still responsible for paying because their name is on the account. 

Whilst this is an aggravating situation to be in, some spouses may find that it's worth swallowing their pride and paying more than their fair share in order to clear the debt, say experts.

The problem with retaining joint credit card debt after you divorce 
Unfortunately, if your ex-partner does not keep up with their half of the joint credit card repayments that you agree on, the card issuer has a right to come to you for this money.

Even if the divorce decree found one party responsible for the payments, the company can still chase you if your name is on the account. Should this happen and you withhold payment too, your credit rating will be affected.

That's why some experts advise that you do everything you can to ensure that the joint credit card debt is repaid in order to protect your credit rating -- even if it means repaying debt that you didn't accumulate. It may be painful in the short term -- but you will later find that protecting your credit rating is worth the temporary expense.

See related: 5 common love and money mistakes; Love and Money: 5 tips for newlyweds

Published: 1 August 2011