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Credit Cards and Divorce

Credit Cards and Divorce

Credit Cards in a divorce

Credit card accounts and debt can become contentious issues during the divorce process. How is credit card debt divided? Who keeps the credit cards after divorce? What happens if my spouse obtained a secret credit card during our marriage? Here are answers to five frequently asked questions regarding credit card issues during divorce.

  1. How Is Credit Card Debt Divided?

Credit card debt accrued during marriage is divided fairly between spouses, which usually means an equal division regardless of which spouse incurred the debt.

  1. What If My Spouse Opened a Secret Credit Card During Our Marriage?

While the general rule is to divide all marital credit card debt between spouses, Nebraska courts do recognize a few exceptions.

For example: if your spouse incurred debt (1) without your knowledge or consent, and (2) for personal gain (as opposed to benefit the marriage/family), then courts may refuse to divide such debt. A common example of this exception is a spouse who opens a secret credit card.

  1. Who Gets to Keep the Credit Card After Divorce?

Credit cards issued in only one spouse’s name are typically awarded to that spouse, while joint credit cards are often ordered to be closed. Debts incurred after the divorce or separation on joint accounts are still joint debts.

For example: if your spouse is awarded a joint credit card and buys a new TV with that card after your divorce, you are still liable for timely payments on that credit card even though you are no longer married and did not consent to the TV purchase with the joint card. And your credit score can suffer if that debt becomes delinquent.

  1. How Can I Protect Myself from My Spouse’s Credit Card Purchases?

If you are worried about your spouse racking up debt on a credit card in your name, contact your credit card company to see what measures can be taken to either remove your spouse’s purchasing ability or to freeze your account.

For debt that your spouse is incurring on his or her own credit cards, it is important to contact your attorney as soon as possible to determine what legal steps you can take to limit your responsibility for this debt, which may include obtaining a restraining order that restricts your spouse’s ability to make further purchases.

  1. Can I Open a New Credit Card Account After I Have Filed for Divorce?

Yes. And in some cases, it may be advisable to do so to establish your own credit.

Your legal team at Koenig|Dunne is experienced with credit card division and debt during a divorce, and we are here to help you navigate through this stressful and sometimes complicated aspect of divorce.

David Pontier