You Can Divorce Your Spouse, But Can You Ditch the Credit Card Debt?

Divorce can have a major impact on a family’s finances, especially if either spouse or both spouses have high credit card balances. How the credit card debt is handled during the divorce depends on a number of factors, including who incurred the credit card debt and for what purposes.

In New Jersey, the Court will examine the reason debt was incurred, not who used the credit card or whose name is on the credit account. Even if your name is not on the credit card, you are not an authorized user, you have never used the credit card, or you do not know the balance you may still be responsible for part of the debt if it was used for marital expenses.

Marital expenses broadly includes (but is not limited to) any expenses that were part of the family lifestyle such as clothes, household items, groceries, eating at restaurants, payment of vehicles, family vacations, and/or entertainment. More generally, any expense for a purchase that is reasonably needed by one family member will be part of marital debt. Credit card debt covering those types of expenses, no matter whose name is on the account under, will be divided through equitable distribution. 

On the other hand, if there is credit card debt that was accumulated solely by one party for non-marital expenses in nature then you may be able to ditch debt post-divorce. Some examples may include secret gambling, drug use, or spending related to extramarital affairs.   

The way you handle credit card debt in a divorce can have an impact on your finances in the future. If you have questions on how to handle credit card debt, and if it is marital debt, contact the family law attorneys at Cohn Lifland Pearlman Herrmann & Knopf to discuss alternate solutions for dealing with debt during the divorce process.