How Is Credit Card Debt Split in Divorce?

Debt and Family Law Divorce

Married people often have credit cards in common and don’t always think about who is making purchases on them, but what happens when divorce enters the picture?  Determining how credit card debt gets split in divorce presents unique issues, so Illinois has specific rules for assigning responsibility between divorcing spouses. It’s important to be aware of them so you don’t get stuck having to pay for charges run up by your spouse.

There are times when even if your spouse was the one who incurred the debt on a credit card, you may be held responsible. In addition, creditors may be able to go after you for debts held jointly if your former spouse doesn’t pay.

The experienced and compassionate Illinois family-law attorneys at Wolfe & Stec, Ltd. understand that credit card debt is a major issue for people going through a divorce. We can provide professional guidance to examine your situation and come up with strategies to protect you and your children before, during and after the divorce process.

We offer a free consultation, so don’t delay.  Contact us online or call our offices today to set up your free consultation.

Why credit cards can be a problem

Credit cards can be a major source of debt. The average American has about three credit cards and a total balance of $6,375, according to Experian’s annual study on the state of credit and debt in America. The average credit card interest rate is 14.87 percent, and the average household pays a total of $904 in credit card interest each year, according to NerdWallet.

It’s not uncommon for some spouses planning to divorce to run up bills on joint credit cards or those that are in their spouse’s name before their partner can even realize it.

Fortunately, Illinois law has some provisions for splitting credit card debt that helps prevent this from happening.

How is credit card debt split in an Illinois divorce?

Illinois is an equitable distribution state, and credit card and other marital debts are typically divided as part of the property division phase of a divorce. The courts will examine your financial situation and determine which spouse should be responsible for what debt. However, the only debts which the court splits are those classified as “marital.”  Marital debt includes most liabilities incurred during the marriage and before the date of separation — regardless of which spouse’s name is on the debt.

Equitable means fair, but not necessarily equal, so you may have to pay a debt that your spouse is not able to because it will cause you less hardship. Also, some spouses may wind up with more debt and receive other marital assets to make things more equitable.

Splitting credit card debt can become complicated. If either spouse has a credit card when coming into the marriage, the balance on the card would be considered a “separate” debt and belong to that spouse alone. If one of you is just an additional cardholder on the spouse’s credit card, the debt will generally belong to the main cardholder.

The courts may examine purchases made on a credit card to see if they related to the marriage. If the cardholder spouse benefitted from the purchase alone, the debt would probably be classified as separate, but if both spouses benefited from the purchase, the debt would be considered as marital. If the card is a joint account, both spouses are still responsible for the debt, and if one fails to make payments, creditors will pursue the other.

By law, the cardholder owes the debt to the credit card company even if the other spouse is assigned the debt in the divorce. This could affect the cardholder’s credit rating if the other spouse fails to make required payments.

In splitting debt, the courts will consider several factors that include:

  • Who benefited from the purchases. If the cardholder spouse benefitted from the purchase, the debt likely would be classified as separate, but if both spouses or the family benefited from the purchase, the debt would be considered as marital.
  • The specific needs of both spouses.
  • The length of the marriage.
  • The amount of any spousal support and/or child custody awards.

If you are the primary cardholder, you remain contractually obligated to the credit card company even if the court assigns the debt to your spouse in the divorce, and creditors can try to collect from you. This could affect your credit rating if your spouse fails to make payments. Even if your divorce agreement has provisions to force your ex to pay, going to court to enforce them is expensive.

To avoid this result, the court may decide to keep the marital debt solely with the cardholder, but then offset the award with a larger share of marital property.

Get Help – Contact Us For A Free Consultation

Every divorce is unique, as financial situations, personal property and circumstances differ, and children may be involved.  Some couples can work out their debt differences amiably; others fight a bitter war to the end and wind up having a difficult, expensive, and drawn-out contested courtroom proceeding.

Since divorce is so complex and emotionally sensitive, it is most important to have an experienced divorce attorney on your side. The skilled Illinois family-law attorneys at Wolfe & Stec, Ltd. have helped countless families dealing with divorce.  We will fight to protect your spousal rights and assets and guide you through each step of the divorce and post-divorce period.

For a free initial consultation with an experienced and compassionate divorce attorney at Wolfe & Stec, call or contact us online today to set up your free consultation.

Attorney Natalie Stec

Natalie M. Stec, born and raised in Illinois, and earned her Bachelor of Science from the University of Illinois at Urbana-Champaign. Her practice has been concentrated in significant pre and post decree marital and family law cases; including custody, visitation, support, and paternity matters. She has important criminal defense experience in both misdemeanor and felony cases. She is a very dedicated and passionate litigator. [ Attorney Bio ]