Many couples spend considerable time worrying about dividing valuable assets like their home or cars when they divorce. Fewer concern themselves with who takes responsibility for their collective debts such as credit cards or personal loans.
Property division discussions must address both assets and liabilities. Let’s look at two approaches to tackling credit card debt that may be good options for you as you finalize your divorce.
Pay off and close your credit cards
If you have the funds on hand to pay off your credit cards, then it’s best to do so. This is the only way of guaranteeing that a creditor won’t end up pursuing you for any debt that you and your spouse incurred. You’ll also save on interest charges.
While you might draft a divorce settlement where your spouse agrees to pay off your debts, your creditor has no obligation to abide by that agreement. They can come after you to collect on any joint debts if they become delinquent on those payments or they file for bankruptcy.
Asking your credit card company to issue separate cards
Another option is calling your issuers and asking them if they can split your balance between two different accounts. They may or may not be willing to do this.
What solution for tackling credit card debt in a divorce is right for you?
The financial impact that a divorce can have on your life can be crippling. Finding out that credit card debts that you remember addressing in your divorce settlement didn’t go as you anticipated may make things worse. You owe it to yourself to consult with an attorney about property division early in the divorce process. You can help protect your financial interests by doing so.