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6 rules for dealing with joint credit card debt during a divorce

By UK CreditCards.com

Published: 1 November 2011

 
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Divorcing a spouse can be hard on your finances. However, there are steps you can take to make the divorce less financially painful. 

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Here are six expert rules for dealing with joint credit card debt during a divorce.

1. Do deal with your joint debt before you formally divorce.
Although money might be the last thing on your mind during this tough time, keeping joint credit card debt after the divorce has gone through can turn messy. Credit card companies are not bound by a divorce decree, so if your ex-partner does not make payments, you will be liable for that debt.

In general, divorce lawyers and credit counsellors will recommend that you try to end your marriage with no joint credit card debt. This may sound like a tough order, but there are several steps you can take to prevent carrying joint debt over into your post-divorce lives.

The first and perhaps the most obvious option is for each party  to agree to pay half of the debt before the divorce is completed.

In the event that this is not financially viable, you could transfer your share of the balance onto a credit card solely in your own name and take on the debt yourself. Alternatively, you could use any joint savings to completely repay the balance or use equity from property you owned together.

Tip: Where possible, it is always better to try and sort out your joint finances amicably rather than via the legal route, as this could cause additional expense and send you further into debt.

2. Do cancel all existing joint credit card accounts.
Make sure that you cancel every single account that you have listed in both names, including old or dormant credit card accounts. This will prevent you from running up further joint debt after the split.

Tip: Know what you're responsible for paying after the accounts have been closed. The latter part of the divorce process includes equitable distribution; this will decide how much of the remaining debt each party is responsible for paying. Any credit card debts accumulated in a marriage are the responsibility of both parties, provided both are co-signers on the account. However, if you are only an additional cardholder on a credit card account, you are not responsible for repaying the debt.

Divorce is an expensive process. Adding to any existing debts can make the divorce even more difficult than it has to be and will make it harder for you to move on.      

3. Do keep a record of your own charges.
If you decide to make further charges onto the joint credit card after you have separated, you will be personally responsible for repaying the balance. Keep a record of all the charges that you make and the accompanying dates so that you can prove what charges are yours if the purchases are ever questioned.

Tip: Leave your joint cards at home. You are better off applying for your own individual credit card, rather than adding to the balance on your joint cards.

4. Do open an individual account.
If you don't have any of your own individual accounts after your joint accounts are closed, you might find yourself in a predicament. It can be very difficult for an older person without any history of individual credit to be eligible for a credit card in the future.

Tip: Open an individual account in your own name before the divorce goes through, as your joint assets and credit lines will still be registered in your name.

5. Don't be afraid of seeking debt help.
If you are going through a divorce and are looking for some debt help, your first stop should be one of the many reputable debt or divorce charities in the UK, such as Divorce Aid or Consumer Credit Counselling Service (CCCS).

The CCCS is a registered British charity and provides all of its services free of charge. If you are in financial difficulty, CCCS can also help you with money management, debt management plans and individual voluntary arrangements. 

Tip: Take care when searching for a company providing debt help, and check in advance if the company will take a fee for their services.

6. Don't get into more debt.
If you are considering divorce or are in the middle of a break up, it is not a good idea to get into any further debt, particularly joint debts. At this point in time, it is important that you instead start controlling your costs and working out your finances for a newly single life.

Tip: Create a budget and stick to it. Divorce is an expensive process. Adding to any existing debts can make the divorce even more difficult than it has to be and will make it harder for you to move on. 

See related: Dealing with credit card debt during a divorce; 5 common love and money mistakes

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